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Online Stores With Payment Plans

Online Stores With Payment Plans
Online Stores With Payment Plans

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In this article, We are sharing all the information about Online Stores With Payment Plans.

The number of Buy Now, Pay Later sites has increased rapidly in the last few years. According to Sensor Tower data, active users jumped 186% in one month in 2020. Many people like BNPL apps because they are easy to use, are available almost everywhere, and are often interest-free. There are so many different apps that it’s hard to tell what makes them unique.

The United States has seen a steady rise in installation rates of payment plan apps since COVID-19’s economic impact became widely felt in March 2020. In September, Sensor Tower Store Intelligence data revealed that first-time users of top U.S. apps in this category increased 115 percent year-over-year, while monthly active users increased by 186 percent.

What is Buy Now Pay Later?

Buy now, pay later plans allow customers to buy merchandise on credit but without a credit card at the point of sale. The most popular options include Affirm, Afterpay, Sezzle, Klarna, etc. Most of them perform instant soft credit checks on customers (the kind that doesn’t affect your credit score).

There are many ways for customers to repay their loan balance, which usually depends on which company they used and how much was borrowed; some payment options incur interest, while others don’t, and some companies charge late fees. BNPL companies may charge retailers a fee to offset the lack of interest charged to consumers.

How Buy Now Pay Later works?

The five-step BNPL process is the same for consumers as well as retailers.

  1. Checkout Begins as Usual for a Customer: The BNPL process begins as any other e-commerce transaction if you’re a customer. You select merchandise from your favorite online stores, prepare to pay, and then shop your favorite stores online.
  2.  Retailers can Buy Now and Pay Later with BNPL Vendors: A customer will have the option of paying with BNPL or using credit or debit cards during the checkout process.
  3.  Lenders Run Soft Credit Checks on Customers: The customer enters certain personal information with the BNPL lender when they purchase using BNPL (for example, their full address or Social Security number). To ensure the customer will repay the loan, the lender immediately runs a soft credit check on them. This type of credit check will not impact credit scores because it is not reported to credit bureaus.
  4.  The BNPL Vendor Charges Retailers a Fee: It is the BNPL vendor who takes a percentage of retail transactions, which is billed directly to the retailer. As a result, the BNPL lender deducts the fee (generally between 2% and 8%) when remitting funds to a merchant. A credit card company has similar arrangements with retailers like this.
  5.  The Balance is Paid Off Over Time by the Customer: Most BNPL vendors offer interest-free payments to customers who pay their full balance in a short period (usually 30 days). Lenders offer different payment plans at different interest rates for customers needing more time to pay their balance. As with credit cards, the less interest a customer pays, the faster they pay off the balance.

What Are Online Stores With Payment Plans?

So many online shops nowadays make finding the most trustworthy and reliable ones difficult. Affirm, Afterpay, and Klarna are among the credit card companies offering point-of-sale installment loans, which let you pay for your purchases over time with no interest.

The BNPL payment method is rapidly integrating the digital market as it gives customers the confidence that they will be allowed the items they want and can pay over time if they have the full amount.

6 Best Online Stores With Payment Plans

It has been demonstrated that buy now, pay later services help retailers increase sales volume overall. BNPL services have become more viable as a result of retailer preferences. The following are six highly regarded options.

Here are the 6 Best Online Stores With Payment Plans


Affirm is the best BNPL app for in-store transactions because it is free, widely accepted, and offers the widest range of payment options. Buyers can choose between a Pay-in-4 plan and a monthly loan over 48 months. If you’re looking for a great way to pay for smaller purchases on Best Online Shopping Sites with Credit Lines, Pay in 4 is a fantastic option with no interest or fees. The APR on larger purchases ranges between 0% and 30%, but there are still no fees.

Affirm works with thousands of retailers, including big names like Target and Amazon. Affirm isn’t available at checkout? It’s no problem. BNPL, Affirm’s online credit card app, allows you to create a virtual credit card to use online or in-store.


  • There are no late fees.
  •  Online and in-store use available
  •  Virtual cards are accepted almost anywhere.
  •  Any BNPL with the longest payment terms


  • There is the possibility of a 30% interest rate on monthly loans.
  •  Various factors influence interest rates, such as length and purchase amount – so it can be difficult to predict what they will be
  •  There is a possibility of credit bureaus reporting loan activity every month.


Klarna is as good as it gets as BNPL’s virtual card, but it is as good as BNPL’s app for in-store transactions. Klarna offers no interest or fees on most plans if you pay on time.

You can add the virtual card to a mobile wallet, such as Apple Pay or Google Pay. BNPL convenience combined with contactless payments makes this an ideal solution. You’ll be approved instantly after tapping your card. Klarna’s mobile app also offers exclusive discounts, rewards points, and curated shopping tips.


  • A global network of over 400,000 merchants in 45 countries
  •  An app that offers curated shopping advice
  •  You won’t be charged if you’re on time.
  •  A rewards program that offers exclusive discounts


  • Credit bureaus may report late or non-payment
  •  The late or returned payment fee is $7 (up to 25% of the purchase price).
  •  There is a maximum interest rate of 29.99% on monthly loans.


The only BNPL app that can improve your credit score is Sezzle, so we selected it as the best for bad credit. You can upgrade to Sezzle Up if you make on-time payments.

There is a standard Pay in 4 installment plan offered by Sezzle, with 0% interest, no late fees, and a six-week installment period. Sezzle needs to report payment history to credit bureaus under this plan. However, the Sezzle Up credit line reports your purchases and payment history. Using this method, you can improve your credit score by making timely payments.

Sezzle also offers long-term financing through Ally or Bread. These loans come with interest, but the longer the repayment period, the larger the purchase.


  • Sezzle or Sezzle Up at 0% interest
  •  There is a free rescheduling option (per purchase)
  •  Credit scores can be improved using Sezzle Up
  •  There is no late fee


  • Only valid at participating merchants
  •  More funds or expired cards will incur a $10 fee.
  •  A late payment with Sezzle Up could harm your credit score.


Afterpay has a fast and easy application process that may or may not require a soft credit check. The company offers 0% interest and does not report purchases or payment history to credit bureaus.

A key feature that makes Afterpay stand out is its ability to prevent overspending and reward smart spending. For example, you can increase your purchase limit if you make good payments in the past. You can also get automatic payment reminders to ensure you get all the payments.


  • The interest rate is 0%
  •  After the first application, there are no credit checks
  •  Credit bureaus are not notified of purchases or payments
  •  A good payment history increases the purchase limit


  • The card is only valid for merchants that participate in the program
  •  There are steep late fees ($10 for the first late payment, $7 each over 25% of the purchase price) for late payments.


Splitit differs from other BNPL sites in using your existing credit without conducting a further credit check. Splitit is already approved for those with credit cards. A credit card gives you the security of a 0% interest loan while saving money.

The Splitit app temporarily holds your credit card funds when you purchase. Automatic deductions are then made when payments are due. This means you’ll still be able to earn rewards points, airline miles, or card perks with your purchases.


  • The interest rate is 0%
  •  There is no credit check
  •  Credit card holders are already approved
  •  Existing credit cards can earn rewards points and perks


  • Credit cards must already be in your possession
  •  American Express is not supported
  •  Splitit does not charge interest, but your credit card fees may apply if you do not pay the full amount


Zip (formerly Quadpay) is an option for customers bypassing the credit check. The Zip credit card offers 0% interest and does not report purchases or payment history to the credit bureaus.

Zip charges the buyer a small fee for each transaction. Zip offers BNPL options to those who might not qualify for other options due to its limited installment options and low purchase limit.


  • The interest rate is 0%
  •  There is no credit check
  •  No credit bureaus are notified about purchases or payments


  • Every purchase is subject to a $4 transaction fee
  •  Each late payment is subject to a $7 fee
  •  Installment terms are only available in one option

4 Advantages of Online Stores With Payment Plans for Customers

There are several possible benefits for consumers who use Online Stores With Payment Plans services.

No Credit Card Needed

The BNPL equalizes the playing field for people without credit cards. BNPL services offer many of the same benefits as credit cards but are designed specifically for smaller, individual purchases. If a virtual card number is requested ahead of time, customers can even use BNPL services like credit cards. Using this card number will cover the exact amount required for the purchase. This can all be done on the BNPL vendor’s website or through an app on their smartphone.


There are several payment options available at BNPL. Various options are available to customers for BNPL services at the point of sale. BNPL customers can pay the full purchase price with BNPL or split the purchase between BNPL and some other payment source (such as a debit card).


The high-interest rate on credit cards has led to up to 15% of Americans no longer using their cards. The average interest rate has exceeded 20%, so it’s no surprise. There are interest-free payment options available from BNPL. Customers can borrow money without paying interest if they choose a short loan period and make timely payments.

No Credit History Impact

Soft credit checks have no impact on your credit score. Many BNPL vendors conduct soft credit checks on their clients to confirm their eligibility for financing. This will not damage your credit score in the same way as a hard credit check. BNPL vendors are also reported to credit bureaus when you are late in making payments, similar to when you are late with your credit cards.

How Using Online Stores With Payment Plans Options Benefits Retailers?

The retailers want their payments immediately, regardless of whether their customers spread the costs over a longer period. If a customer purchases from a BNPL provider like Klarna, Affirm, or Sezzle, the funds will be transferred immediately to the retailer. 

These companies use smart algorithms to assume credit risk for both retailers – paying them even if consumers default – and consumers.  Whatever happens, everyone is protected. Implementing BNPL will benefit retailers in the following ways:

Attracts New Customers

It has long been difficult for online retailers to offer the convenience of trying before buying – people want to feel the fabric between their fingers and see if the shoes fit. A great opportunity exists for online businesses to offer buy now, pay later options.

The BNPL provides organizations with features like free returns and dedicated customer service that make purchases easier and more flexible for consumers. Free returns may seem like a cost sink, but they are a crucial business tool. 

Better Customer Experience

While it may be true that Millennials and Gen Z love shopping, browsing, and uncomplicated delivery, like everyone else, they demand and expect a superb shopping experience.

You need to build a platform up to the task to get the younger generations and keep them as customers. That has to come before you start thinking about reward programs, loyalty schemes, or other nice-to-haves.

Increased Sales

There can be challenges associated with purchasing a big-ticket item, whether the shock of seeing a large sum of change leave your account or the prospect of high interest rates on a credit card. This is part of the reason why BNPL is boosting conversion rates. 

The price ranked first as the most common reason for cart abandonment, according to the Baymard Institute. When shoppers have installment options, sticker shock can be reduced significantly, encouraging them to complete their purchases.

Higher Customer Lifetime Value

A major advantage of BNPL for consumers is that it gives them more control and flexibility over what and how they buy. A merchant attracts more Millennial and Gen Z customers, converts average basket sizes, and gets more repeat visits. 

Positive purchase experiences mean customers will return repeatedly since they’re key to customer retention. As a result, they’ll return to you when it’s time to buy their next big ticket item after they learn you offer BNPL.

How to Choose the Right Online Stores With Payment Plans Provider

The first step in choosing the right BNPL provider is understanding the kinds of items you want to sell, the costs, and, most importantly, the customers. The following options are essential for choosing the right BNPL provider for your business once you’ve got that under control. 

Repayment Terms

BNPL organizations typically offer multiple installment plans and term lengths, ranging from a few weeks to several years. Identifying your average order value (AOV) is crucial when determining which repayment options work best for your business. 

If you have a high AOV, your best option is to choose BNPL providers that offer repayment over a longer period, such as several months to years. Alternatively, if your AOV is lower, consider plans requiring fewer installments for a shorter period. 

Credit Limits

There are usually minimum and maximum credit limits for BNPL providers. To determine what provides the best service for your business, consider your credit limit and your AVO before selecting a provider. 

Geographic Locations Served

The provider you select may be determined by where you are located or where you operate. You may need to use multiple providers in different markets to ensure that you have access and can use multiple providers.

Buy Now Pay Later vs Credit Card

There are some key differences between BNPL apps and credit cards regarding deferring payments.

  • Payments on BNPL loans are always fixed. When you pay on time, you will only be charged interest if you are on time with your payments. Credit card Payments are also due, but interest will be accrued if you don’t pay the full balance.
  •  BNPL apps almost always charge simple interest when they charge interest. The loan only has to be repaid with interest. A credit card charges compound interest instead. The balance, as well as any existing interest, will be subject to interest.
  •  Lastly, each BNPL purchase is its lump-sum installment loan. There must be approval each time for these one-time credit lines. Credit cards are used repeatedly instead of credit cards, which provide revolving credit.

Does Buy Now Pay Later Affect My Credit Score?

The majority of BNPL loans do not affect your credit score, whether it is good or bad. Most BNPL providers don’t record your payment history, and the loan terms are typically too short.

A credit check may be involved with applying for a BNPL app, but it is usually a soft inquiry. You can think of a soft inquiry as a background check for your credit. These soft checks also have no impact on your credit score.

You must pay attention to the details of the BNPL loan you are applying for. You may be reported to the credit bureaus if you make purchases or pay some lenders. They can, therefore, be used to raise your credit score. You can still damage your credit if you miss or make late payments.

Alternatives to Online Stores With Payment Plans

Some small businesses may not be eligible for BNPL. Shoppers and businesses can explore these alternatives:

  • Layaway. It is still possible to offer layaway if your business can handle it. The customer must pay in installments before receiving the product under this arrangement.
  •  Personal loan. Shoppers who can’t afford something and can’t use their BNPL or credit cards can take out a personal loan. Merchants should not suggest this to customers — allow them to decide for themselves.
  •  Loyalty program incentives. Customers might be rewarded for purchases through a loyalty program. You can offer discounts or allow customers to use loyalty program points to pay for purchases.
  •  Incomebased pricing. Some businesses offer income-based pricing that enables customers to pay what they can. A lot of trust is involved in this topic, and it can take time to navigate.
  •  Store credit card. Credit cards branded with the name of a major retailer are available from many major retailers. Small businesses may need help accessing this route, but it may become an option as your company grows.


Are Buy Now, Pay Later Worth It?

Your financial situation determines how much you can afford. The buy now, pay later option might be worth considering if you can pay off the purchase before the interest-free period ends without having any other debts. The purchase could be risky and expensive; however, if you have other debt or cannot pay the purchase in full before the interest-free period expires.

Should I Offer Buy Now, Pay Later on My Website?

BNPL is gaining popularity, and retailers and other organizations that don’t offer it will stay caught up. Honestly, why wouldn’t you do that? BNPL enables your business and your customers to make more informed purchasing choices.

Why Do People Use the Buy Now, Pay Later?

Many people use the buy now, pay later services because they can afford to make purchases they couldn’t make upfront. It is common for customers to take advantage of BNPL services to spread the cost of their purchase over a set period, often without a credit check or any interest charges. They can manage their finances conveniently and cost-effectively as a result.

About the author

Vishal Agrahari

Vishal Agrahari is an experienced content writer and financial expert. With his creative and technical expertise in finance and credit cards, he creates content on AquilaResources that is both engaging and useful for readers. He brings a strong background in finance and credit cards that make bring authenticity to his content along with an interest in research to every project he works on.

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