Buy Now Pay Later: is it worth offering in your shop or e-commerce?
The customer pays in instalments. You get the full amount right away. Sounds too good, so let's find where the catch is.
"Buy now, pay later" has become one of the fastest-growing payment methods in Europe, especially among younger consumers. For a merchant, the idea of increasing average order value without taking on credit risk sounds like a free lunch. It's not entirely true, but it's still an option worth evaluating seriously. Let's look at how it really works.
How it works from the merchant's side
The customer chooses to pay in instalments at checkout, the BNPL provider checks the customer's creditworthiness in real time and, if approved, credits you the full order amount, minus a fee.
The risk that the customer doesn't pay the following instalments stays entirely with the BNPL provider, not with you: this is the core value of the service for a merchant.
Why it increases average order value
Several industry studies show that offering instalment payments increases purchase intent for higher-value items that the customer would otherwise have postponed or dropped.
It also reduces cart abandonment for high-value purchases, where paying the full amount upfront is the main psychological barrier.
The real cost to consider
The fee charged by BNPL providers is generally higher than a standard card payment fee, to compensate for the credit risk they take on.
You should always calculate whether the increase in average order value and the reduction in abandonment really offset the higher fee, using real data from your own store, not just general industry statistics.
When it makes sense to offer it, and when it doesn't
Medium-to-high-value products (electronics, furniture, mid-range fashion) are where BNPL shows the best results.
For low-value items, the higher fee rarely justifies itself against the marginal benefit on conversion.
- The BNPL provider takes on the credit risk, not the merchant: you receive the full amount right away.
- It increases average order value especially on medium-to-high-value products.
- The fee is higher than a standard card payment: always calculate the real return.
- It's not suited to every type of product: evaluate your average order value before activating it.
- Activating BNPL without calculating whether the benefit really offsets the higher fee.
- Offering it on low-value products where the marginal benefit is minimal.
- Not clearly communicating the instalment payment terms to the customer.
Frequently asked questions
No, the BNPL provider takes on the credit risk toward the end customer. The merchant receives the full order amount, minus the fee, regardless of the customer's subsequent behaviour.
Yes, many BNPL providers offer integration for small e-commerce businesses too, with fees that vary based on the transaction volume handled.
Technically you can integrate multiple providers, but for most merchants a single well-integrated provider is simpler to manage and sufficient for most of the demand.
Increase average order value with no credit risk
With Daevon's BNPL solution, you offer instalment payments to your customers while always receiving the full amount right away.
