Best Buy Now Pay Later AppsWho are the Best BNPL Service Providers, from a Merchant’s Perspective?

December 1, 2022 | 14 min read

Best buy buy now pay later apps

In a Nutshell

Debating whether or not to add a BNPL payment option to your checkout process? If so, there’s a lot to consider here. There are many obvious benefits that BNPL offers you as a merchant. But, there are drawbacks to consider as well. This article will take a close look at both and provide you with the top 5 providers on the market today – including the pros and cons of each.

Weighing the Best Buy Now Pay Later Apps & Service Models of the Year

“Buy now, pay later” is a hot topic in today’s payment landscape. What’s not to love? Consumers can make interest-free payments and take home an item for which they’d otherwise have to scrimp and save. In response, many merchants have begun to add BNPL to their checkout options, and are reaping the benefits as a result.

In a recent article, we ran down the basics of the BNPL business model. But, how do you determine if BNPL is a good fit for your business? Which service providers are currently leading the pack, and are there any downsides you need to consider?

Let’s take a look at some of the benefits and potential drawbacks of BNPL, then dig into the best buy now pay later apps on the market today.

The Merchant Benefits of BNPL

Firstly, it’s important to understand that BNPL isn’t going to be ideal for every business. If you don’t have much of an online presence, or sell mostly on a cash basis, then buy now pay later options won’t be of much use to you. 

The payment method does offer many potential benefits for your business. These include:

Bigger Purchases

When BNPL is available, many customers may ultimately spend more than they would have otherwise. Decreasing the financial impact of larger purchases can remove hesitation at checkout and improve your bottom line. Afterpay, for instance, claims its service leads to 18% higher order values.

Broader Appeal

As mentioned above, BNPL is extremely popular with the public, particularly among Millennials and Gen-Zers. Arguably BNPL options could therefore drive up sales among both groups, which could have a profound impact on sales. To illustrate this, over 61% of shoppers ages 18 to 24 said they had used a BNPL service in 2021. This is significantly higher than the almost 38 percent recorded in a previous survey in 2020.

Diversifying Checkout Options

Whatever you think of it, we are living in a stage of instant gratification. The more checkout options you provide, the more likely you are to make catch customers who may have spent their money elsewhere.

Higher Sales

BNPL often makes online purchases easier and more convenient, driving sales in the process. Indeed, offering any one of the leading BNPL companies at checkout may boost eCommerce conversions by 20-30%.

Keeping Businesses Competitive

The last thing to remember is that BNPL isn’t only popular, it’s trending. Another study showed that 54% of consumers polled said they wouldn’t have made a purchase if BNPL wasn’t an option. That’s quite an incentive to include BNPL at checkout.

How the Merchant/BNPL Provider Relationship Works

Typically, you contract with a service provider to offer BNPL as an option at checkout. The buy now pay later app facilitates the purchase, and takes a small portion of the transaction total to pay for their services.

Here are a few more specific points aimed at addressing common questions about the merchant/provider relationship:

Risk & Liability

The service provider typically assumes all the risks associated with the purchase transaction. This is great news for you as a merchant. If the customer misses a payment, the service provider is responsible; you’ve already been paid for the transaction.

Even if the purchase results in a chargeback, it would not really be your concern in most cases. Of course, it’s still important to ask any provider how they, specifically, handle disputes and chargebacks.


The service provider is usually responsible for issuing any refunds requested by consumers. As with the above matter, the specifics of how this is done can vary from one service provider to the next.

Some BNPL providers will not issue a refund to a customer until they’ve completed all the payments, for instance. It’s important to get these details and clearly communicate them to customers before a purchase.

Billing Descriptor

Consumers may be unable to recognize your charge on their statement if it appears with an unfamiliar vendor name and dollar value. They may believe the charge is fraudulent and try to fight it through the chargeback process, or seek to recover their funds some other way.

You need to work with the provider to ensure that the charge is easily recognized. Even if it doesn’t immediately impact your bottom line, this could still impact your reputation as a merchant.

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Top 5 BNPL Service Providers (+ Their Pros and Cons)

To simplify things for you, we’ve compiled a list of the five best buy now pay later apps and service providers on the market today. Below, you’ll find some key details about the company, and how to get started with each.

Keep in mind that pricing information is based on third-party data, and may not reflect a company's current pricing. Contact the service provider in question for clarification on any pricing information.

Best Buy Now Pay Later Apps

#1. Klarna

Klarna is very popular among younger generations of shoppers and is accepted by many online and millennial-focused retailers like SHEIN Corporation, Sephora, and H&M. Klarna integrates with Shopify, VendPOS, and Shift4Shop. As a result, Klarna is probably the most easily recognizable BNPL provider for consumers.

Klarna apportions plans depending on gross annual sales. There’s a service level for merchants that make less than $3 million in sales, and one for those who make more. The company provides financing in 17 countries, which is great if your business sells internationally. Klarna also integrates with several eCommerce platforms like Stripe.


  • Multiple financing plans
  • No set loan limitations
  • Low APR for long-term loans


  • $7 late fee after 10 days
  • 12 month contract
  • Higher processing fees

How to Get Started With Klarna

There is no upfront fee to get started with Klarna, but their full contract terms are not published on their website. Rather, Klarna states that there’s a 12-month obligation per contract with automatic renewal.

To get started, you’ll have to fill out a form via the website above, and provide several details. They need your live retail website, business contact information, average product costs, and shipping and return policies. If Klarna determines you’re a good fit, one of their reps will reach out to you.

For Use: Online and in-person (with app QR code or Klarna Card)

Fees: 3.29% to 5.99% plus $0.30

Terms: Contract

Best Buy Now Pay Later Apps

#2. Affirm

The mobile-friendly, omnichannel solution offered by Affirm is optimized for eCommerce, in-store transactions, and telesales. Affirm provides the tools which you need to easily integrate pay-over-time options for shoppers. The company is accepted by big-name retailers like Amazon, Peloton, and Walmart. Affirm also integrates with eCommerce solutions like BigCommerce, Shopify, Wix, and WooCommerce.

Much like Klarna, Affirm doesn’t disclose its terms directly on its website. That said, rates and contract length are likely determined by your processing value and overall revenue. Additionally, Affirm integrates with an average of 45 eCommerce platforms, which makes it the most prolific on this list.


  • Claims 85% higher conversions
  • Up to $17k purchase limit
  • Integrates with 45+ eCommerce platforms


  • Services restricted to North America
  • Contract terms not listed on site
  • High interest rates for customers

How to Get Started With Affirm

To start with Affirm you will need to visit their site and fill out a form that includes your business details relevant to products and revenue. An Affirm rep will then reach out to you and determine if your business is a good fit.

For Use: Online and in-person (with Square POS or Affirm card)

Fees: 5.99% plus $0.30

Terms: Individual basis; Decision in 1-3 business days

Best Buy Now Pay Later Apps

#3. PayPal

PayPal Later is PayPal’s BNPL option. One big advantage offered here is that the service requires no additional setup if you already offer PayPal at checkout. Instead, PayPal Later processes its BNPL payments automatically and integrates with most eCommerce platforms.

PayPal Later is likely the simplest BNPL option on this list. It would require the least amount of effort on your end, which is a definite plus.


  • Automatic BNPL processing with PayPal Merchant Account
  • Eligible for PayPal purchase protection
  • Low APR and fees


  • Late fees increase every two weeks
  • No in-store component
  • High interest rates for customers

How to Get Started With PayPal Later

If you’ve already enabled PayPal Checkout, you don’t have to do anything else. PayPal Later will process BNPL payments automatically. If you don’t have it and think it’s best for your business, simply visit the website above to request sign up.

For Use: Online

Fees: 1.9% to 3.49% plus $0.50

Terms: Individual basis; per PayPal schedule

Best Buy Now Pay Later Apps

#4. Afterpay

Afterpay, a Square company, can be used on any Square POS or handheld terminal (either produced by Square, or one that is Square-enabled). Many major retailers like Bed Bath & Beyond, Lululemon, and Ulta offer Afterpay as a BNPL option to their customers. Afterpay also integrates with Stripe and Squarespace to offer BNPL services in the eCommerce space.

As the highest customer-rated BNPL option on this list, Afterpay has one of the best reputations in the industry. They offer great flexibility for both you and your customers alike. Customers rave about Afterpay’s interset-free payments, while you enjoy full payment in 48 hours or less. Additionally, Afterpay integrates with 19 eCommerce platforms for online sales. It also features an in-person sales component for Square users. Apart from this, Afterpay is available in eight countries, but does not charge any cross-border fees.


  • Automatic BNPL processing with PayPal Merchant Account
  • Eligible for PayPal purchase protection
  • Low APR and fees


  • Late fees increase every two weeks
  • No in-store component
  • High interest rates for customers

How to Get Started With Afterpay

Similar to the platforms above, you will need to visit Afterpay’s website and fill out a form that asks for your business details. However, unlike the providers above, Afterpay will also require you to provide your EIN (or tax ID number), average annual sales, and additional details that competitors may not require.

For Use: Online and in-person (with Afterpay card)

Fees: 4% to 6% plus $0.30

Terms: Contract; Decision in 48 hours

Best Buy Now Pay Later Apps

#5. Zip

Formerly Quadpay, Zip is popular with customers of Newegg, Famous Footwear, and Fashion Nova. Zip integrates with Shopify, BigCommerce, and Magneto. Zip can also be accepted online or in person. Zip is extremely convenient because it is accepted anywhere in the world that Visa payments are accepted.

Using the Zip app downloaded to their smartphone, customers can scan their QR code to process in-person payments. This makes setup much easier for you, because you won’t need to integrate it with your POS.


  • Offered wherever Visa is accepted, worldwide
  • Fewer setup headaches for merchants
  • Low processing fees


  • Pricing not listed on site
  • $1 customer transaction fee per payment
  • Limited eCommerce integrations

How to Get Started With Zip

Same as with many of the other BNPL providers on this list, you will have to go to the website above to fill out a service application. Once approved for an account, you will be directed to choose from among Zip’s nine available eCommerce integrations.

For Use: Online and in-person (with app QR code)

Fees: 2% to 4% plus $0.15

Terms: Contract

Potential Drawbacks of the BNPL Business Model

As we’ve shown, buy now pay later features a lot of benefits for you as a merchant. Despite all of these very real benefits, there are inevitable drawbacks to consider as well. In fact, the BNPL industry has received intense criticism for allegedly encouraging customers to spend outside of their means. Aside from this, merchants could also increase their risk of fraud for both online and in-person purchases. 

Let’s dig into some of these drawbacks:

Acceptance Issues

You must be approved for BNPL financing in order to offer the method at checkout. BNPL providers will vet their prospective merchants carefully to determine if they fall into a high-risk category or not. If they do, it’s unlikely that they would be approved for financing.

Checkout Friction

Remember: the more steps you set between a customer and checkout, the more likely they could be to abandon their carts altogether. Also, keep in mind that BNPL payments are still loans. This means customers can still be denied.

Fraud Risk

Absolutely no payment option is immune to fraud. BNPL, in particular, is attractive to criminals because they can get away with attacks without necessarily having access to data they might need for conventional card fraud. As mentioned above, BNPL fraud is a very real possibility for any merchant interested in the service.

Increased Fees

BNPL fees are often higher than average credit card transactions, depending on the financing company.

Irregular Integration

Lastly, BNPL services may not universally integrate with every POS system or eCommerce gateway. To add BNPL to your checkout options, an upgrade may be required.

Is BNPL Right for Your Business?

Ultimately, there are no “one-size-fits-all” solutions in business. What works for one company won’t necessarily work for another. Some merchants are highly-energized by the thought of providing their customers with every sort of payment option imaginable. Others, however, might be more prudent about the potential drawbacks listed above. 

Whichever the case may be, it behooves merchants to consider both the pros and cons of each of the top 5 best buy now pay later apps and service providers on this list in relation to their business. Once you have a general idea of which company aligns best with your terms and policies, it’s time to ask yourself a further series of questions:

  • What is my annual revenue?
  • Do I sell mainly in-person or online?
  • What are my customer demographics (age-groups, shopping habits)?
  • Is my business a frequent fraud risk?

Once you’ve answered these questions, you’ll be better situated to decide which BNPL providers would suit your business best.


What is a BNPL platform?

A “buy now pay later” (or BNPL) payment is a consumer loan that allows shoppers to finance purchases in installments, usually four to six installments, over a short period of time. These payments may be offered by merchants at the point of purchase through a third-party financial application like Affirm, Klarna, or Zip. These platforms effectively finance the shopper’s purchase, paying the merchant up front and then collecting payment from the buyer over time.

Who are the biggest BNPL companies?

The most trusted and recognizable BNPL providers among consumers are Klarna, Affirm, PayPal Later, Afterpay, and Zip.

How do BNPL providers make money?

BNPL providers do not typically charge interest to buyers. Instead, they make money from transaction fees collected from merchants; typically 3-6% of the transaction total. Merchants are willing to pay this fee because it means capturing a sale that might not happen otherwise if the buyer didn’t have the money up front.

Which buy now pay later option is best for merchants?

Determining the best BNPL platform will depend on the specific needs of the merchant. Service providers like Klarna, Affirm, and Afterpay all offer similar yet unique services, based on different pricing models.

Why do consumers love BNPL payments?

When taken at face value, one could consider BNPL payments as “part-layaway, part-credit” purchases. These are popular with consumers because BNPL allows them to break up expensive purchases into more manageable installments. SImilary, BNPL could be beneficial to merchants, too, as it encourages customers to spend more than they might otherwise. BNPL can be a real win-win in that regard.

Another BNPL benefit for consumers is that they can use this payment option without running a hard credit check or applying for larger loans to receive financing. Since making a BNPL purchase doesn’t affect their credit score, it enables customers to receive financing even without a great credit history.

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