6 Best Buy Now, Pay Later Apps for Small Businesses in 2023
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
Brigitte is a retail specialist and staff writer with brick and mortar management experience. She is versed in retail sales analysis, merchandising, and buying with an emphasis in retail sales and marketing across platforms. She has a BA in writing from Washington University, St. Louis.
This article is part of a larger series on Payments.
Buy now, pay later (BNPL) apps allow customers to pay for items in four or more installments while you, the merchant, is paid in full right away. This article lists the six best buy now, pay later platforms that retailers can use to offer BNPL financing, which can increase average order value and conversion rates. All the apps have strong reputations, good reviews, and lots of features for both consumers and retailers.
- Klarna: Best overall
- Affirm: Best for high-ticket items
- PayPal Pay Later: Best for businesses that already use PayPal
- Afterpay: Best for catering to younger shoppers
- Zip (formerly Quadpay): Best for small transactions
- Splitit: Best for international sales
Best Buy Now, Pay Later Apps Compared
Processing Fee | Payout | Sales Channels | |
|---|---|---|---|
 | 3.29% to 5.99% plus 30 cents* | Set payment schedule in contract | Online and in person (via app QR code or Klarna card) |
 | 5.99% plus 30 cents* | 1 to 3 business days | Online and in person (via Square POS or Affirm credit card) |
 | 1.9% to 3.49% plus 50 cents | Per your PayPal schedule | Online |
 | 4% to 6% plus 30 cents* | 48 hours | Online and in person (via Afterpay credit card) |
 | 2% to 4% plus 15 cents* | Set payment schedule in contract | Online and in person (via app QR code) |
 | $75/month + 2% to 3.5% of transaction amount + 50 cents–$1.50 per installment | 3 business days | Online and in person (via customer’s existing credit card) |
*From third-party sources. Pricing is not displayed on provider sites.
Loan Limit | Financing Options | Annual Percentage Rate (APR) | Late fees | |
|---|---|---|---|---|
| Based on individual credit | Pay-in-4, pay in 30 days or 6- to 36- month financing | 0% to 28.99% (APR only applies to 6- to 36-month financing) | $7 to up to 25% of purchase value |
| $17,500 | Pay-in-4 or 6- to 48-month financing | 10% to 36% (APR only applies to 6- to 36-month financing) | No late fees; missed payments impact credit |
| $10,000 | Pay-in-4 or 6- to 24-month financing | 9.99 to 29.99% (APR only applies to 6- to 36-month financing) | $0 to $10 or 25% of purchase or $8 of loan value (depends on state) |
| $2,000 | Pay-in-4 | 0% | $8 to up to 25% of purchase value |
| $5,000 | Pay-in-4 | 0% (charges transaction fees instead) | Up to 25% of purchase value |
| Based on available credit | 3- to 24-month financing | 0% | Credit card charges interest; rates vary |
*Starting limits may vary. Affirm encourages responsible spending by increasing its limit as shoppers successfully pay off purchases.
Buy Now, Pay Later Quiz: What Is the Best App for Your Business?
Take this quiz to determine the best BNPL app for your business.
Klarna: Best Overall Buy Now, Pay Later App
Pros
- Lots of financing plan options
- No set loan limits
- Low APR for long-term loans
- Internationally accepted
What's Missing
- $7 late fee after 10 days
- 12-month contract
- High processing fees
Klarna Pricing
- Merchant fees: Set during contract signing; typically rates fall between 3.29% to 5.99% plus 30 cents
- Customer fees:
- Pay-in-four: 0% APR
- Pay-in-30: 0% APR
- Monthly loan: 0% to 2.99% APR
- Late fees: $7 to 25% of loan value
We chose Klarna as the best overall BNPL app because it offers so much for both merchants and consumers. It’s the only option on our list that offers shoppers three ways to pay, and also pays merchants in full according to a schedule they set. It provides on-site messaging so customers know they can use Klarna and what their payments will look like. And, like many other BNPL apps, Klarna offers its own marketplace where you can list your business and attract new customers.
- Multiple financing options: Customers can choose to pay-in-four, pay in full in 30 days, or finance for up to 36 months.
- Klarna App: The Klarna app is part marketplace, where you can list your business and attract new customers, and part customer payment portal, where shoppers can manage their purchases and earn points.
- Klarna Card: Recently introduced in the US, the Klarna card gives consumers a physical card for purchasing with Klarna’s pay-in-four program.
- Integrate Klarna onto your product pages: Show customers all the options before they add items to their carts by displaying Klarna financing options right on your product pages.
- Ecommerce integrations and API solutions: Klarna integrates with 11 ecommerce solutions, including BigCommerce, Shopify, and WooCommerce, and payment gateways like Stripe and Adyen. It also offers an application programming interface (API) for custom integrations.
Affirm: Best for High-ticket Sales
Pros
- Claims 85% increase in AOV
- $17,500 purchase limit
- Integrates with 47 ecommerce platforms
Cons
- Only services North America*
- Website does not list price
- Potentially high interest rates for customers
Affirm Pricing
- Merchant fees: Undisclosed; third-party sources list prices of 5.99% plus 30 cents
- Customer fees:
- Late fees: None; missed payment may impact credit
- Pay-in-four: 0% APR
- Monthly loan: 10% to 36% APR
Affirm differs from other BNPL apps because it offers an extremely high purchase limit of $17,500 and up to 48-month financing, as opposed to 36. For these reasons, we like Affirm best for high-ticket sellers. It works with big-ticket merchants like Kay Jewelers and Peloton, but it can also work with small retailers, with pay-in-four options and a $50 minimum spend.
With Affirm’s 12.7 million US shoppers, retailers offering financing services report an average 85% boost in their AOV and a 20% repeat customer rate.
- Multiple financing options: Customers can choose to pay-in-four or finance their purchase for six to 48 months.
- US-only: Affirm works with US-based businesses or businesses with a US entity, a US-based bank account, and the majority of their customers having a US billing address.
- Integrate Affirm onto your product pages: Allow customers to see all Affirm financing options before they add to cart right on your product pages.
- Affirm app: The Affirm app is part marketplace, where you can list your business and attract new customers, and part customer payment portal, where shoppers can manage their purchases.
- Ecommerce integrations: Integrates with major ecommerce solutions, including Wix, WooCommerce, Shopify, SalesForce, Stripe, and BigCommerce.
*Affirm works in Canada under the name PayBright. To use PayBright, you need a Canadian store and to bill customers in CAD, but do not need to have a Canadian entity or bank account.
PayPal Pay Later: Best for Businesses That Already Process Payments With PayPal
Pros
- Comes automatically with every PayPal account
- Low processing rates
- PayPal purchase protection
Cons
- Not available for in-store purchases
- Late fees can be steep
PayPal Pricing
- Merchant fees: 1.9% to 3.49% plus 50 cents
- Customer fees:
- Late fees: $0–$10 or 25% of purchase or $8 of loan value (depends on state)
- Pay-in-four: 0% APR
- Monthly loan: 9.99% to 29.99% APR
PayPal Pay Later is a great option for lots of businesses, especially those that already use PayPal to process their payments. Every business that uses PayPal to process transactions has access to its BNPL services automatically. All you have to do is integrate the BNPL option into your website’s checkout. This means you don’t have to sign up for or integrate with another BNPL app to offer customer financing.
While it is easiest for PayPal users to use, you can also add PayPal Pay if you use third-party payment processors or even other BNPL apps. PayPal integrates with most ecommerce platforms but is not compatible with in-store use. PayPal also assumes all the loan risk for any PayPal purchases or loans.
- Multiple financing options: Customers can choose to pay-in-four or to finance their purchases for three to 24 months with PayPal Credit.
- Pre-integrated into PayPal merchant accounts: If you already have a PayPal merchant account to process your other ecommerce transactions, BNPL financing options are already available via your existing PayPal Business account.
- Ecommerce integrations and API solutions: PayPay integrates with almost every ecommerce platform on the market. In cases where they do not offer integrations or if you want to elevate your checkout experience, PayPal offers custom integrations.
Afterpay: Best BNPL App for Stores Catering to Gen Z
Pros
- Integrated into Square POS, ecommerce, and other services
- 0% APR
- 48-hour payout, guaranteed
Cons
- Pricing not listed on website
- Only 19 ecommerce integrations
- Only pay-in-four financing available; no monthly financing plans
Afterpay Pricing
- Merchant fees: Undisclosed; third-party sources say 4% to 6% plus 30 cents
- Customer fees:
- Late fees: $8 to 25% of purchase
- Pay-in-four: 0% APR
Afterpay is a pay-in-four BNPL app with the highest customer rating of those on our list—4.8 out of 5 stars, according to more than 180 customer reviews. Customers enjoy interest-free installments while you get your money in full within 48 hours of the purchase, guaranteed. Finance sites recommend the pay-in-four financing service especially for Gen Zers still learning to manage money. It offers smart card limits to help shoppers develop good spending habits, so it’s a good choice if you cater to that crowd.
In the news: In January 2022, Block—which is made up of Square, Cash App, Spiral, TIDAL, and TBD54566975—acquired Afterpay for its family of financial services. Square has launched its first integration with Afterpay, offering the BNPL service to Square Online and Square POS in the US and Australia.
According to Afterpay’s findings, retailers using the service see an 18% AOV increase. Additionally, 57% of consumers are more likely to choose your site if you offer Afterpay financing, and 85% of Afterpay users discovered a new merchant in the last six months via the Afterpay app. While impressive, Afterpay’s success stats are somewhat lower than those reported by the other providers. Even so, these are not bad, and the acquisition by Block certainly helps merchants using Square POS, ecommerce, and payment solutions.
- Pay-in-four model: Afterpay only offers a pay-in-four financing option.
- In-store use: Shoppers download the app and tie it to their digital wallet (Apple Pay, Google Pay, and Samsung Pay). They can use the app for in-person sales at participating merchants.
- Square integration: Square POS systems and ecommerce sites have Afterpay pre-integrated as a payment option.
- Ecommerce integrations and API solutions: You can integrate Afterpay with any of 19 ecommerce platforms or use an API.
Zip: Best for Small Transactions
Pros
- Serves 51,000 merchants around the world
- Low processing rates
- Available anywhere Visa is accepted
Cons
- Does not list prices on its website
- Only offers pay-in-four financing options, no monthly
- $5,000 spend limit
- $1 customer transaction fee per payment
Zip Pricing
- Merchant fees: Undisclosed; third-party sources say 2% to 4% plus 15 cents to 30 cents
- Customer fees:
- Late fees: $5 to $10, depending on state
- Pay-in-four transaction fees: $4 per purchase; $1 per installment
Since our last update: Last year, Zip and Sezzle were planning a merge but Zip has since terminated the deal.
Zip (formerly Quadpay) is another BNPL service that caps its loans at $5,000, making it ideal for businesses that conduct smaller sales. It is also the only pay-in-four app in this guide that charges customers a transaction fee instead of any APR—ideal for purchases with longer plans.
Zip claims some of the highest success rates of those on our list: 80% increase in repeat customers, 60% increase in order sizes, and 20% increase in cart conversion.
- Pay-in-four model: Zip (formerly Quadpay) only offers a pay-in-four financing option.
- In-store sales: Customers can use their Zip app to generate a quick response code (QR) code for their purchase, and then you simply scan the QR code to process the payment. You don’t need to integrate with your POS system at all, making it the best for in-person sales.
- Ecommerce integrations and API solutions: You can integrate Zip with nine different ecommerce platforms or use an API.
- Zip App: The Zip app is part marketplace, where you can list your business and attract new customers, and part customer payment portal, where shoppers can manage their purchases.
- Marketing tools: Zip provides you with in-store signage and product page integrations so that customers always know their financing options.
Splitit: Best for International Sales
Pros
- Transparent pricing
- Charges to credit cards in installments; customers build credit
- Plus Plan includes gateway charges
- In-person: can be used anywhere Mastercard, Visa, and Discover are accepted; online: 53 countries
Cons
- Only monthly payment plans; no pay-in-four option
- Pays out in three business days
- Standard plan members get paid in installments, as the customer pays
- Integrates with only seven ecommerce platforms
Splitit Pricing
- Merchant fees:
- Standard: $75/month + 2% of transaction amount + $1.50 per installment
- Funded: $75/month + 3.5% of transaction amount + 50 cents per installment
- Customer fees:
- Late fees: Credit card charges interest; rates vary
- Interest: As charged by your credit card
Splitit is the best BNPL app for international businesses because it is available in 53 countries. Klarna, PayPal, and Afterpay also work with international merchants, but in far fewer locations. Plus, like Zip, Splitit is good for in-person payments anywhere Mastercard, Visa, and Discover are accepted.
Like others on our list, Splitit takes responsibility for chargebacks and fraud, and it is also the only app on this list with pricing plans on its website. One thing to note about Splitit’s payment structure—with the standard plans, merchants are paid as the customer makes their installments, rather than upfront like with our other options.
Splitit is also unique from a shopper’s perspective. When a shopper selects Splitit at checkout, they will choose how many installments they want to make. Then, rather than paying through the BNPL provider, Splitit guarantees a shopper’s purchase by placing a preauthorization hold on their credit card while the total amount is outstanding. Splitit will reauthorize the hold and reduce the amount each month, and the bill is paid off. That means that shoppers can enter into a monthly payment plan without the steep APR that you see with our other providers.
- Monthly financing: Splitit only offers monthly financing with plans ranging from three to 24 months.
- In-person sales: Shoppers can use Splitit in-store with ApplePay and Google Pay by downloading the Splitit App and generating a Splitit QR code, text message, or email, when buying from participating merchants.
- Ecommerce integrations and API solutions: Choose from one of Splitit’s seven ecommerce integrations or use an API to add the BNPL app to your site. You can also customize Splitit’s product page and checkout messaging.
- Credit card rewards: Because Splitit purchases are financed through customer credit cards, they will be able to get all their credit card points and rewards for Splitit purchases.
How We Evaluated Buy Now, Pay Later Apps
When considering the best BNPL apps, we took a two-pronged approach. First, we looked for those that worked well for customers because, if shoppers don’t use them, they’re no good for you. Here, we looked for ease of use, credit pulls, flexibility of payments, and whatever made it stand out from the crowd.
The second piece we looked at was the merchant side. Here, we looked at transaction fees and what benefits they claimed in terms of increased transaction amounts, repeat customers, and completed sales. We also took into account what country or state a merchant had to be in and where it accepted payments, what ecommerce platforms and other small business tools the company integrates with, and payout/funding times.
BNPL Apps Frequently Asked Questions (FAQs)
Click through the questions below to get answers to some of your most frequently asked BNPL questions.
A buy now, pay later (BNPL) app refers to a third-party application that you can add to your ecommerce site or POS system that allows you to offer customer financing to shoppers as they check out.
You can learn more about offering buy now, pay later for your business by checking out our article on What is BNPL? A Small Business Guide to Buy Now, Pay Later.
Buy now, pay later financing is not only popular now but projected to grow in value by double digits through 2025. You can learn more about the state of BNPL and its future projections with our guide to Buy Now, Pay Later Statistics for 2023.
Klarna is a leading BNPL solution that retailers can add to their sites. With Klarna, you can offer an array of financing options for purchases large and small. Read more with our Klarna review.
Bottom Line
Buy now, pay later apps are great for merchants, especially those selling online. They can cut down abandoned shopping carts, increase AOV, and encourage repeat shopping. You have to pay a transaction fee for most, but all can pay you in full, and most assume responsibility for chargebacks and fraud.
We chose Klarna as the best overall BNPL app. It works internationally, offers multiple payback options for consumers, and integrates with a wide variety of online ecommerce and payment processing systems. Head over to its website and fill out the form to get started.
