For businesses looking to integrate buy now, pay later (BNPL) solutions, choosing the right provider is essential to optimize revenue and customer experience.
I evaluated the following buy now, pay later companies based on transaction fees, revenue impact, supported regions and industries, and integration options to help determine which best suits your business needs:
Buy now, pay later apps allow customers to split their purchases into multiple installments, often interest-free, while merchants receive full payment upfront. This financing model increases average order value (AOV), enhances conversion rates, and attracts a wider customer base. Below is an overview of the best BNPL companies, comparing key considerations to give a better idea of what each provider offers for different business types.
| Merchant processing fees | Sales channel integrations | Integration types | Supported locations | |
|---|---|---|---|---|
| Affirm | Typically 5.99% + $0.30 | In-store, mobile (in-app), ecommerce, online marketplace, telesales | Plug-and-play, APIs | U.S., U.K., Canada |
| PayPal Pay Later | 4.99% + $0.49 | Mobile (in-app), ecommerce | Automatic, custom APIs | All PayPal locations |
| Klarna | 5.99% + $0.30 | In-store, mobile (in-app) | APIs, Plug-and-play for UK businesses | North America, Europe, U.K. |
| Afterpay | Custom | In-store, mobile (in-app), ecommerce | Plug-and-play, APIs | U.S., U.K., Australia, New Zealand |
| Zip | Custom | In-store, mobile (in-app), ecommerce | Plug-and-play, APIs | U.S., Australia, New Zealand |
| Shop Pay Installments | Typically 5.99% + $0.30 | In-store, ecommerce | Plug-and-play | U.S. |
SEE: Why BNPL Skyrocketed During the 2024 Holiday Season
Affirm specializes in financing high-value purchases with extended repayment terms, making it ideal for businesses selling expensive products. It offers multiple integration options and supports any business with a U.S., Canadian, or UK bank account. Affirm lets customers pay in four interest-free payments every two weeks and/or installments for up to 36 months.
Affirm sets itself apart with its high spending limit and long financing terms, making it a better choice for businesses selling luxury or high-ticket items than Klarna, which has a broader but more general financing structure. I also like how it supports multiple integration options, so businesses can use Affirm for in-person, online, marketplaces, mobile, and even telesales.
Visit Affirm
How to integrate Affirm with your business platform: Affirm supports five different integration types designed for various payment methods, including in-person and e-commerce. Visit Affirm’s integration documentation.
| Pros | Cons |
|---|---|
| Wide range of compatible platforms | Requires a minimum AOV of $50 |
| No late fees for customers | Interest rates as high as 36% for extended loans |
| Transparent pricing | Funding takes up to 3 business days |
PayPal Pay Later is the native buy now, pay later solution from PayPal. The solution is pre-integrated into PayPal Business accounts, providing seamless checkout for businesses already using PayPal as a payment processor. PayPal offers the traditional BNPL zero interest with Pay in 4, while PayPal Credit is for extended monthly payment options.
As the pioneer in digital payment solutions, PayPal’s seamless integration is unmatched, making it the go-to BNPL solution for businesses already using PayPal. Merchants have the advantage of attracting over 400 million people using the platform. However, unlike competitors such as Afterpay and Klarna, PayPal lacks in-store compatibility.
Visit PayPal
How to integrate PayPal Pay Later with your business platform: In addition to the standard BNPL integration, advanced customizations are available via PayPal Checkout APIs. Visit PayPal’s API documentation.
| Pros | Cons |
|---|---|
| No additional setup for PayPal merchants | Not available for in-store purchases |
| Lower processing fees compared to competitors | Higher late fees than some competitors |
| PayPal purchase protection |
Klarna offers a comprehensive BNPL solution with multiple financing options for customers and robust merchant support, including marketplace exposure and seamless e-commerce integration. Its diverse financing options and strong brand presence make it an ideal choice for businesses looking to cater to a broad customer base.
Unlike PayPal Pay Later, which is limited to PayPal transactions, Klarna integrates with multiple platforms, providing a more extensive reach. I also like Klarna’s growing partnerships with merchant acquirers and payment processors, such as Adyen and Stripe. But what makes Klarna stand out is its suite of native marketing tools, including in-app ads, personalized content, and store locator maps.
Visit Klarna
How to integrate Klarna with your business platform: Klarna provides API integration tools for U.S. merchants. Visit Klarna’s integration documentation.
| Pros | Cons |
|---|---|
| Multiple financing options | Plug-and-play integration only for UK merchants |
| No preset loan limits | 12-month merchant contract required |
| Low APR for extended loans | Late fees for customers ($7 to 25% of loan value) |
Afterpay specializes in interest-free pay-in-four installments and is popular among retailers that cater to Gen Z and millennial shoppers. It was acquired by Square’s parent company, Block, and now offers a simple plug-and-play integration to its point of sale (POS) software. Afterpay also offers API-based integration for popular e-commerce platforms, including Shopify.
Most reviews praise Afterpay for its focus on young shoppers. But it’s Afterpay’s seamless Square integration that clearly sets it apart from other providers in this guide. With Square’s feature-rich free all-in-one POS plan, even merchants with a very limited budget can stay competitive. The provider also integrates with popular e-commerce and payment processors but not as extensively as Klarna.
Visit Afterpay
How to integrate Afterpay with your business platform: Supports both plug-and–play as well as RESTful APIs for custom integration. Visit Afterpay integration documentation.
| Pros | Cons |
|---|---|
| High customer adoption among Gen Z and millennials | Funding takes up to 5 business days |
| Seamless integration with Square POS | Late fee for missed payments |
| Stripe, Adyen, and other payment processor integration | Merchants in certain U.S. states are not eligible for Pay Monthly financing* |
| *Nevada, West Virginia, Hawaii, New Mexico | |
SEE: POS Terminals Explained By Experts: A Complete Guide
Zip (formerly Quadpay) is a buy now, pay later solution that offers various financing options based on the user’s credit standing. It supports both online and in-app payments, as well as in-person transactions at the point of sale via a physical and virtual (contactless) card. Like its more popular counterparts, Zip partners with big brands such as Amazon, Walmart, Target, and Nike.
Zip stands out among other BNPL providers in this list for allowing shoppers to adjust the payment terms on outstanding BNPL loans (refinancing). While it may cost customers more, letting shoppers know that they have this option gives Zip a unique marketing advantage. I’m also impressed with Zip’s high user ratings on both iOS and Android apps, though, like Affirm, its serviced regions are very limited.
Visit Zip
How to integrate Zip with your business platform: Zip supports custom API and Javascript SDK for merchant-initiated gateway API integration. Visit Zip API documentation.
| Pros | Cons |
|---|---|
| Highest iOS and Android app user reviews among providers on this list | Higher fees for customers who opt for extended financing |
| Allows customers to split payments interest-free | Limited international availability |
| Strong e-commerce and POS integration |
Shop Pay Installments is Shopify’s branded buy now, pay later solution embedded into its one-click checkout button Shop Pay. The app is powered by Affirm but is customized to work with Shopify’s advanced omnichannel and multichannel features, including detailed sales tax management, lead generation, marketing, and order and fulfillment tools. While Shopify can integrate with other BNPL providers, a native solution is a more cost-efficient option for merchants.
I gave Shop Pay Installments its place in this guide because, in addition to potential conversion rate boosts from Shop Pay one-click checkout, Shopify’s e-commerce capabilities are simply unmatched. And with its own installment solution pre-integrated into every Shopify e-commerce merchant account, businesses can offer Affirm’s high credit limits and several term options with just a simple integration.
Note: Shopify charges businesses a monthly fee for using its platform on top of merchant fees.
Visit Shop Pay
How to integrate Shop Pay Installments with your business platform: Developer tools available for customizing checkout forms. Visit Shop Pay Installments documentation.
| Pros | Cons |
|---|---|
| Advanced e-commerce management tools | Limited to U.S. merchants |
| One-click checkout | Requires Shopify Payments and Shop Pay |
| 24/7 customer support |
SEE: The 4 Best E-commerce Payment Solutions
Here is a six-step guide for integrating BNPL into your checkout process:
Step 1: Evaluate your current checkout process. Identify potential bottlenecks like slow page loads, complex forms, and limited payment methods.
Step 2: Configure API or Plugin integration.
Step 3: Implement the integration. Ensure proper handling of customer authentication and eligibility checks, payment installment calculations, and error handling and transaction validation.
Step 4: Test for functionality and UX. Conduct test transactions, monitor for errors, and gather user feedback.
Step 5: Ensure compliance and security. Encrypt transactions, implement fraud detection, and comply with PCI DSS and GDPR.
Step 6: Optimize for mobile and UX. Simplify checkout, ensure mobile responsiveness, and personalize the payment journey. Also, enhance the customer experience by:
SEE: Best Mobile Credit Card Processing Solutions
To select the best BNPL solution, businesses should consider:
By carefully evaluating these factors, businesses can implement a BNPL solution that enhances customer experience, increases sales, and aligns with their financial strategy.
Anna Lynn Dizon has over four years of experience in risk mitigation, serving as both a research lead and client liaison. Her fintech journey began at PayPal in customer and technical support, followed by a role in office and finance management for a U.S. company that collaborates with global banks to establish and manage HR and international payment processing. Since 2017, Anna has been a contributing writer for Fit Small Business, Technology Advice, and TechRepublic, covering fintech and POS software reviews, payment processing guides, eCommerce, inventory management, business startups, and regulatory compliance.
