6 Best Buy Now Pay Later Apps for Merchants in 2022
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.
This article is part of a larger series on Payments.
Buy Now Pay Later (BNPL) apps allow customers to pay for items in installments while you, the merchant, are paid in full right away. They also increase average order value (AOV) and the number of sales made. We chose the six best Buy Now Pay Later apps for merchants; all have strong reputations, good reviews, and great service for consumers and retailers. Some offer interest-free pay-in-four-payments plans, while others offer longer-term loans.
- Klarna: Best overall buy now pay later app
- Affirm: Best for retailers that sell high-ticket items
- PayPal Later: Best for PayPal users and solopreneurs
- Afterpay: Best for catering to younger shoppers on stricter budgets or those needing to learn good spending habits
- Zip (formerly Quadpay): Best for brick-and-mortar stores and online sales
- Splitit: Best for international online and in-person sales
What is pay-in-four?
Most BNPL services use a pay-in-four method. The consumer pays 25% at the time of purchase, then makes three more payments of 25% every two weeks. This pays off the “loan” in six weeks. BNPL services do not charge interest for this, and merchants are charged a transaction fee at the time of purchase but receive the full payment at the time of purchase rather than piecemeal.
Best Buy Now Pay Later Apps Compared
Merchant fees | Purchase limit | Available in | Payout | Ecommerce platforms | Customer fees | Payment plans | |
|---|---|---|---|---|---|---|---|
 | Undisclosed | Based on customer bank account and history w/ Klarna | 17 countries | Per a schedule you set | 11 | Late fees ($7–$25); Up to 24.99% interest with loans | Pay-in-4 |
 | 2% to 5.99% + 30 cents* | $50 min, $17,500 max | US | 1-3 business days | 47 | No late fees; up to 30% interest | Pay-in-4 |
 | Already in PayPal | $30 min, $1,500 max | 45 states in US | Per your PayPal schedule | 19 | Late fees vary by state, no interest | Pay-in-4 |
 | 4% + 30 cents to 6% + 30 cents* | $500, may be more for good customers | 5 countries | 48 hours | 12 | Up to $8 late fees, no interest | Pay-in-4 |
 (formerly, Quadpay) | 2% + 15 cents to 5% + 30 cents* | $1,500 | 8 countries | Per a schedule you set | 12 | Up to $10 late fees; no interest; transaction fees of $4 per purchase, $1 per payment | Pay-in-4 |
 | 1.5% + $1.50 to 3.9% + 30 cents | Based on available credit | Anywhere Visa, Mastercard, and Discovery work; 53 countries online | 3 business days | 6 | Credit card charges interest | 3 to 24 months |
*Pricing from third-party sources
Klarna: Best Overall Buy Now Pay Later App
Klarna
What We Like
- Multiple payback options for consumers
- Assumes chargeback and fraud risks
- Marketplace and promotions available
- Internationally accepted
What's Missing
- Website does not list price
- 12-month contract
- Up to 24.99% interest for customers
Klarna Pricing and Key Features
- Merchant fees: Undisclosed
- 12-month contract, automatic renewal
- Customer fees:
- Pay-in-four: 0% interest
- Pay-in 30: 0% interest
- Loans: up to 24.99% interest
- Late fees: $7–$25
Retailers using Klarna:
- 400+ retailers
- Macy’s
- H&M
- Sephora
- Teleflora
- Etsy
- Lululemon
- Starbucks
- Target
We chose Klarna as the best overall BNPL app because it offers so much for both merchants and consumers. It’s the only one on our list that offers shoppers three ways to pay, but it pays merchants in full according to a schedule they set. It provides on-site messaging so that customers know they can use Klarna and what their payments will look like. Like many others, it has its own marketplace where you may attract new customers and offers integrated marketing campaigns for added promotion.
Klarna splits its plans depending on your gross annual sales: those making less than $3 million in sales and those making more. It’s free to get started, but Klarna does not list transaction pricing on its website. Its terms do say there’s a 12-month obligation with automatic renewal, so get a quote and do some comparisons before committing. It services merchants in 17 countries, making it good for international sales. It integrates with only 11 shopping carts but is popular with payment processors like Stripe.
Over 147 million shoppers use Klarna’s marketplace. The provider said that, on average, its merchants see an increase in conversions of 30% and in checkout value of 41%, and merchants noted 40% of their new customers are Klarna users. For comparison, PayPal’s conversion rate is 64%, while Zip claims an AOV increase of 60%; however, in aggregate, Klarna’s percentages are among the best.
What Klarna Is Like for Shoppers
Shoppers have a choice of payment plans when it comes to Klarna. The most popular is the pay-in-four plan, in which they make a 25% payment at the time of purchase and pay the rest in three biweekly payments.
They also have the option to pay the item completely in 30 days, which is great for on-a-whim purchases or something that can’t wait for payday. Finally, for larger purchases, it has financing for up to 36 months—but the interest is steeper than most credit cards (up to 24.99%). Customers can earn points on its Vibe Loyalty program for future purchases.
In the News:
In February 2022, Klarna opened up its waitlist for the Klarna Card to US consumers. This gives consumers a physical card for making purchases in Klarna’s pay-in-four program.
How to Add Klarna to Your Checkout
To sign up with Klarna, you’ll need to provide a business email and have a live retail website, which must include business contact information, products with pricing, and clear policies for shipping and returns. When ready, fill out the form on Klarna’s website, then a rep will contact you to get started.
Klarna integrates with 11 ecommerce solutions (including BigCommerce, Shopify, and WooCommerce) and payment gateways (like Stripe and Adyen). It also offers an API for custom integrations.
Affirm: Best for High-ticket Sales
Affirm
What We Like
- Claims 85% increase in AOV
- High purchase limit
- Influencer network
- 47 ecommerce platforms
What's Missing
- US shoppers only
- Website does not list price
- Potentially high interest rate for customers
Affirm Pricing and Key Features
- Merchant fees: Undisclosed; third-party sources list prices anywhere from 2% to 5.99% + 30 cents
- Customer fees:
- Late fees: None
- Pay-in four: 0% interest
- Loan: 0% to 30%, simple interest
Retailers using Affirm:
- Walmart
- Delta
- Peloton
- Michael’s
- Poshmark
- Kay Jewelers
Affirm differs from other BNPL apps in that it has a minimum spend of $50 but a maximum of $17,500, which is the highest on our list, and offers pay-in-four or pay in up to 48 months (with interest). For these reasons, we like Affirm best for high-ticket sellers. In fact, it works with big-ticket merchants like Kay Jewelers and Peloton, but it can work with small retailers as well.
Like all of the BNPL providers in this guide (except Splitit), Affirm does not reveal its transaction rates on its website. Third-party sites claim transaction rates run 2%–4%, which is competitive, to up to 5.99% + 30 cents. It may depend on the tools you select, as Affirm offers promotions on its marketplace, email and custom marketing campaigns, and access to its influencer network.
Affirm boasts the highest AOV increase: 85% through bundles, upgrades, and add-ons. It also said merchants see an average repeat purchase rate of 20%. Its marketplace is used by 11.2 million shoppers, and it integrates with 47 ecommerce platforms, which is more than most on our list. It pays you the full purchase price in one to three days, which is about average for BNPL services.
Affirm works in Canada under the name PayBright. You need a Canadian store and to bill customers in CAD but do not need to have a Canadian entity or bank account.
What Affirm Is Like for Shoppers
Affirm only works with US-based customers who can use it online or in-store with the Affirm app. When they check out, they can choose to pay-in-four with no interest. Alternatively, they can spread out the payments over 48 months. The most common payment plans are three, six, or 12 months, however. The interest can be as high as 30%—higher than Klarna’s —but depends on the individual’s credit. Affirm shows the interest at the time of payment so shoppers can make the best decision.
How to Add Affirm to Your Checkout
To start with Affirm, you first fill out a form that includes your ecommerce platform and annual revenue. Then, a representative will contact you about tailoring a best-fit solution. Note that 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.
PayPal Later: Best for Operations Offering PayPal
PayPal Later
What We Like
- No extra transaction fees
- Pays in full along with other PayPal payouts
- PayPal purchase protection
- Increases closings by 64%
What's Missing
- Unavailable to residents of Missouri, Nevada, New Mexico, North Dakota, Wisconsin, or any US Territories
- For PayPal users only
- Not for in-store purchases
PayPal Later Pricing and Key Features
- Merchant fees: None (covered in PayPal transaction fees)
- Customer fees:
- Late fees: 25% of purchase or $8, whichever is less
- Interest: None
Retailers using PayPal Later:
- Any retailer that offers PayPal
PayPal Later refers to its two programs: PayPal Credit and PayPal Pay-in-Four. They are similar to Affirm and Klarna in that they are not offered wherever PayPal is, but when they are, it’s easy for customers to pay in installments on purchases anywhere from $30 to $1,500. Even better, they provide the same PayPal protection plan as with regular purchases. Because they work along with PayPal, they are a great choice for very small businesses and even solopreneurs.
PayPal, one of the most trusted payment venues for online shopping, is the easiest of the BNPL services we reviewed—plus it has no extra charge. However, you need to include it in your cart to take advantage. You can add it along with other payment providers, even next to other BNPL apps. PayPal Later is available in only 45 states in the US. However, it also works for several countries in Europe and Asia-Pacific. Terms of payment differ by country.
The provider noted 64% of consumers said they’re more likely to make a purchase if PayPal Later is offered. It also found that 74% of BNPL users were prompted early in the shopping experience. PayPal, therefore, provides dynamic messaging to inform customers that they can get that expensive item and pay in installments.
What PayPal Later Is Like for Shoppers
PayPal users can take advantage of PayPal Later—if they live in an area where it’s offered. PayPal Pay-in-Four lets shoppers pay in four equal payments, while PayPal Credit is like a credit card. (They may have to apply.) As a consumer shops, PayPal sends a message offering the appropriate BNPL option for the price and region.
How to Add PayPal Later to Your Checkout
You need a PayPal business account to offer PayPal Later. However, it’s free and easy to sign up. Once you have a PayPal account, go to the PayPal website and sign up—PayPal will handle the rest.
Afterpay: Best BNPL App for Stores Catering to Gen Z
Afterpay
What We Like
- Part of the Square family
- No interest
- 48-hour payout, guaranteed
- 4.78 customer rating (highest on our list)
What's Missing
- Pricing not on website
- Only 12 ecommerce integrations
- Lower AOV increases than others on our list
Afterpay Pricing and Key Features
- Merchant fees: Undisclosed; third-party sources say 4% + 30 cents to 6% + 30 cents
- Customer fees:
- Late fees: 25% of purchase or $8, whichever is less
- Interest: None
Retailers using Afterpay:
- Square retailers in US and Australia
- Ulta
- Urban Outfitters
- Lululemon
- Bed Bath & Beyond
- Aéropostale
Afterpay is a pay-in-four BNPL app with the highest customer rating of those on our list—4.78 out of 5 stars averaged over multiple third-party review sites. Customers enjoy interest-free installments while you get your money in full within 48 hours of the purchase, guaranteed. Finance sites recommend it for Gen Z, especially students still learning to manage money because its smart card limits help shoppers develop good spending habits, so it’s a good choice if you cater to that crowd.
You can integrate Afterpay with any of 12 ecommerce platforms or use an API. Afterpay works in eight countries: the US, Australia, New Zealand, the UK, Canada, France, Spain, and Italy. Like the other apps here, it does not charge cross-border fees. It also does not list fees on its website but gives a custom quote. We found transaction fees ranging from 4% + 30 cents to 6% + 30 cents, which is on the high end for those in this guide.
Afterpay’s success stats are somewhat lower than those from the other providers: 20% increase in cart conversion (64% for PayPal Later), 25% increase in AOV (Zip claims 60%), and 30% new customers (Klarna claims 40%). Even so, these are not bad, and the acquisition by Block will help Square users. Like most of the apps on our list, it offers its own marketplace and makes store recommendations to users.
What Afterpay Is Like for Shoppers
Afterpay is easy to 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 or choose Afterpay when paying online. They put 25% down and have six weeks to pay, interest-free. If they are late with a payment, they may have a late fee of 25% of purchase or $8, whichever is less. The app encourages responsible spending by only increasing limits as the shopper successfully pays off purchases.
How to Add Afterpay to Your Checkout
Like the other top BNPL apps on our list (except PayPal), you’ll need to fill out a form and be contacted by a customer rep. Afterpay’s form is a little more involved, wanting your EIN, contact information, annual sales, and other data.
Zip: Best for In-person Sales
Zip
What We Like
- Joining forces with Sezzle
- 51,000 merchants around the world
- 80% increase in repeat buyers
- Available anywhere Visa is accepted
What's Missing
- Does not list prices on its website
- Reports say new merchants have higher transaction rates
- Customers pay transaction fees
Zip Pricing and Key Features
- Merchant fees: Undisclosed; third-party sources say 2% + 15 cents to 4% + 15 cents, with 5% + 30 cents for new merchants
- Customer fees:
- Late fees: $5–$10, depending on state
- Transaction fee: $4 per purchase; $1 per payment
Retailers using Zip:
- Airbnb
- Guitar Center
- Lego
- Goodyear
- Sam’s Club
- World Market
- Sears
- Running Center
Zip (formerly Quadpay) is the only pay-in-four app in this guide that charges customers and merchants, but it pays merchants in full according to a schedule you set. It is accepted anywhere Visa is, making it easily international for both online and in-person sales. For in-person sales, you simply scan the QR code to process the payment, or the customer can use it through Google Pay and Apple Wallet. You don’t need to integrate with your POS system at all, making it the best for in-person sales.
Zip does not list rates online, but research shows they range from 2% + 15 cents to 4% + 15 cents. One unusual note was a comment that new clients were charged more: 5% + 30 cents. Customers also incur transaction fees: $4 per purchase, $1 per payment. This is unusual for BNPL apps, but does not take away from its popularity with shoppers. Late fees run $5–$10, depending on the state.
The provider claims one 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. It, too, has a marketplace but does not offer the promotional tools of Klarna and Affirm.
What Zip Is Like for Shoppers
To use Zip, shoppers link it to a payment card, e.g., Visa, American Express, and Discover. Then, they download the app (which can hold their Apple Wallet and Google Pay) to use it in person or select it when shopping online. They pay at least 25% at the time of purchase, and then pay the rest in biweekly payments. As with most of the other providers here, they can also use the app to shop in the Zip Marketplace. Zip autofills payment information for added convenience.
In the News: Zip Acquires Sezzle
In February 2022, Zip announced it is buying out Sezzle. The move is to make the combined company a leader in the US BNPL market, but there’s no further information on what that merger will mean for merchant customers or shoppers.
Sezzle is similar to Zip in that it lets shoppers pay off a purchase in four biweekly payments, but it has one advantage—shoppers can choose to postpone or reschedule a payment. The first change in payment date is free; after that, it costs $5 per change. Sezzle is also a certified B corporation, meaning it’s demonstrated commitment to social and environmental issues. This could be an advantage for green companies.
How to Add Zip to Your Checkout
You’ll need to apply for Zip, which is typical, but you may have to disable any ad blockers before you do it. Once you have an account, it takes only 10 minutes to add a Zip widget onto your platform. Zip says it does not require APIs.
Splitit: Best for International Sales
Splitit
What We Like
- 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 Discovery are accepted; online: 53 nations
What's Missing
- Standard plan pays you in installments
- Pays out in three business days
- Integrates with only six ecommerce platforms
Splitit Pricing and Key Features
- Merchant fees:
- Standard: From 1.5% + $1.50
- Funded: From 2.5%
- Splitit Plus: From 3.9% + 30 cents
- Customer fees:
- Late fees: None
- Interest: As charged by your credit card
Retailers using Splitit:
- Canyon Bicycles
- Nectar
- My Vegan
- Sundays
- Echelon Fitness
- ZECO Scooters
- Super Butcher
Splitit is the best BNPL app for international businesses because it’s widely available. It works with merchants in over 50 countries for online sales. (Klarna, PayPal, and Afterpay also work with international merchants, but in far fewer countries.) Plus, like Zip, it’s good for in-person payments anywhere Mastercard, Visa, and Discover are accepted.
The provider takes a unique approach to buy now pay later. It ties to a consumer’s credit card and charges that card for the shopper’s payments. In this way, you get paid for the purchase—and Splitit gets paid by the credit cards. Like others on our list, it takes responsibility for chargebacks and fraud. It’s also the only app here that has pricing plans on its website:
- Standard (from 1.5% + $1.50): Pays you in installments in-line with the customer’s payment plan
- Splitit Plus (from 3.9% + 30 cents): Pays in installments like the standard plan, but includes Splitit payment processing
- Funded (from 2.5%): Gets you the full amount up front; must be a US, Canadian, UK, German, or Australian business processing at least $500,000 annually
Splitit claims a strong success rate, with 30% cart conversion and 50% higher AOV. Even more, it says its AOV is $1,000. By comparison, the AOV for Afterpay is $150 and for Affirm $800—although Affirm can finance much higher purchases.
What Splitit Is Like for Shoppers
Splitit ties to the shopper’s credit card. When they pay, they simply select how many installments they want to make. Splitit then charges the card according to the installments. This means the shopper is not paying credit card interest on the entire purchase—but just on the installments as they register on the system. Splitit does not charge shoppers for this and does not have late fees.
How to Add Splitit to Your Checkout
If you process under $2 million annually, you can create your Splitit account by filling out a form, and then you can add Splitit to your online store or simply start accepting in-person. If you process more than $2 million a year, a rep will contact you about more customizations.
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.
For merchants, 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, integration, and payback.
Bottom Line
Buy Now Pay Later apps are great ideas 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.
You May Also Like …
- Learn more about accepting payments at your business with merchant accounts
- See the latest buy now, pay later statistics
- Read more about how to offer customer financing to your shoppers
