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Buy now, pay later — giving shoppers more choice at checkout

As e-commerce continues to grow, making purchases from home or from a mobile device has become a routine part of daily life. A recent survey by Bank of America found that 42% of Americans plan to spend more online in 2024. And as shoppers add groceries, medical care, and even cars to the list of goods they buy online, almost a quarter of all retail purchases are expected to take place online by 2026.

Just as the range of products available to online shoppers grows, so do their expectations at checkout. That includes having a broad selection of payment choices that align with their individual needs, budget, and purchase total. Merchants should be aware of their customers’ expectations at checkout to ensure they offer the best range of payment options to capture each sale and avoid unnecessary cart abandonment.

The buy now, pay later option

One of the more recent payment options adopted by many merchants is buy now, pay later (BNPL). BNPL is an alternative payment method that allows shoppers to break up the total cost of their purchase and pay over time in affordable installments. Generally, a customer that selects this option at checkout will enter a few pieces of information for a real-time eligibility decision. Once approved, the customer chooses their preferred payment schedule and manages their payments through the provider — while the provider pays the total amount to the merchant upfront.

The payment plans available to shoppers depend on the BNPL provider the merchant is partnered with. Installment plans range from short-term options that are paid off in just a few weeks, to longer monthly plans that can span up to three years.

Although still relatively new, BNPL has rapidly become a preferred way to pay for many online shoppers — and merchants that offer BNPL have seen a big uptick in consumers choosing that option at checkout. BNPL hit an all-time usage high on Cyber Monday 2023, according to Adobe research, up 42.5% from the year before. In dollar terms, BNPL users spent over $46 billion between January and August in 2023, up 14.7% YoY.

How consumers use BNPL

BNPL’s record high usage over the holidays underscores one of the reasons for its popularity: It affords individuals and families the ability to balance their cash flow or income against the bump of seasonal purchasing. With flexible payment options, consumers can buy the gifts and goods they want up front while extending their payments for those items into the beginning of the new year — ultimately giving them more flexibility with their holiday spending.

BNPL is also useful for consumers checking out with large baskets. For example, a parent can get all the items they might need to outfit a nursery or to equip a child for a new sport, without being required to pay the entire cost at the time of purchase. With BNPL, customers can make the purchases they need in full while preserving more of their immediate cash flow. The same applies for consumers who need to purchase single high-cost items, such as home furnishings or appliances. Shoppers are no longer required to absorb the entire cost upfront. Instead, they can make necessary purchases without putting extra strain on their budgets — giving them the flexibility to buy what they need without having to delay the purchase.

BNPL has proved popular not only for holiday shopping and large purchases, though. More consumers and merchants are finding BNPL an attractive choice across a growing range of smaller-cost items and emerging online categories such as home accessories, apparel, and tickets to sporting events or concerts.

With its ability to help manage consumer cash flow, BNPL might at first appear most attractive to younger shoppers who have yet to reach peak earning years. But surprisingly, BNPL saw significant adoption by shoppers of all generations during the 2023 holiday season. While the types of purchases differed somewhat between Gen Z shoppers and Gen X or Millennial shoppers, the use of BNPL grew across every age cohort.

Selecting a BNPL provider for your business

What should merchants consider when selecting a BNPL provider? Both the provider’s underlying technology and the payment solutions they offer are important considerations.

First, merchants should consider the type of merchandise they sell, their typical customers, average order size, and potential reasons for cart abandonment. This information can help determine what types of payment plans — short or longer-term, interest-free or interest-bearing — would best suit their customers’ needs.

Along with the kind of payment plans offered, the provider itself and the technology behind the payment products they offer can largely impact the customer’s experience. Just as merchants use data on their customers to optimize the shopping experience or personalize marketing, some BNPL providers use data to power their solutions. For example, Affirm’s Adaptive Checkout solution uses data on the customer and their unique cart to produce the most relevant payment options at checkout, helping the merchant close each sale.

With one in five people surveyed by Adobe indicating they would use BNPL, and with online purchasing trends continuing to rise, merchants can take advantage of Adobe’s seamless integration with Affirm to capture that spend. Affirm offers custom solutions for your business and personalized pay-over-time plans for your shoppers at checkout, with no hidden fees or surprises. The Affirm extension is Adobe-certified as part of the App Assurance Program, and is available for eligible merchants on the Adobe Commerce Marketplace. To add Affirm as a payment option at checkout, you must apply for an Affirm merchant account to get started.

Interested in Affirm for your business? Learn more or get started at

*Payment options through Affirm are subject to an eligibility check, may not be available everywhere, and are provided by these lending partners:

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