Buy Now Pay Later Trends Reshaping Shopify Commerce in 2025

Buy now pay later has gone from a checkout novelty to a mainstream expectation for online shoppers. If you're running a Shopify store and haven't implemented BNPL yet, you're likely leaving money on the table. But adding flexible payment options isn't just about slapping another app on your store—it's about understanding which trends matter, how they affect your conversion rates and average order value, and what your customers actually need at checkout.

The BNPL landscape is evolving fast. What worked in 2024 looks different in 2025, with new providers, tighter regulations, and smarter integrations changing how merchants approach installment payments. This guide breaks down the trends reshaping Shopify commerce right now and shows you exactly how to capitalize on them.

Key Takeaways

• BNPL reduces cart abandonment by making higher-priced items feel more accessible through installment pricing displayed at checkout
• Merchants receive full payment upfront from BNPL providers, improving cash flow while customers pay over time
• Mobile-first checkout experiences and AI-powered instant approvals are making BNPL adoption faster and more seamless
• Regulatory scrutiny is increasing globally—choose compliant providers to protect your brand
• Accessible checkout experiences ensure all customers can complete BNPL purchases, regardless of assistive technology use

What is Buy Now Pay Later and How Does it Work on Shopify

Buy now pay later is a point-of-sale financing option that lets customers split purchases into installments without needing a traditional credit card. Instead of paying the full amount upfront, shoppers divide their total into smaller payments spread over weeks or months—usually with zero interest if they pay on time.

Here's how BNPL works for everyone involved:

How it works for customers: Select BNPL at checkout, get instant approval (often without a hard credit check), and pay in installments over weeks or months. The first payment typically happens at purchase, with remaining installments automatically charged to their linked payment method.

How it works for merchants: Receive full payment upfront from the BNPL provider, minus transaction fees. You get paid immediately, even though your customer is paying over time. This improves your working capital and eliminates risk if the customer defaults—the provider handles collections.

How it differs from credit cards: No revolving debt, often interest-free for customers if paid on time, and approval decisions happen instantly at checkout. Traditional credit cards build up balances that can roll month to month with compounding interest. BNPL typically has fixed installment schedules with clear end dates.

For Shopify merchants, BNPL integrates directly into your checkout flow through apps in the Shopify App Store. Customers see installment options alongside standard payment methods, making the experience seamless.

Why BNPL Matters for Shopify Merchants

Offering flexible payment options isn't just a nice-to-have anymore—it's a competitive advantage that directly impacts your bottom line. The business case for BNPL is straightforward: it removes financial friction at the exact moment customers are deciding whether to buy.

Higher Checkout Conversion Rates

BNPL reduces cart abandonment by lowering the perceived financial barrier at checkout. When a customer sees a $400 jacket, that might feel out of reach. But when they see "4 payments of $100," suddenly the purchase feels manageable.

The psychology here is powerful. Checkout optimization isn't just about page speed or button placement—it's about making the path to purchase feel comfortable. Customers who hesitate at full price often complete checkout when they see payment flexibility, particularly for purchases above their typical spending threshold.

Increased Average Order Value

Splitting costs encourages customers to add more items or choose premium options they might otherwise skip. If someone's comfortable with "$25 every two weeks," they're more likely to add that extra item that pushes their cart to $100 instead of $75.

This isn't just theoretical. Merchants consistently report AOV increases of 20-50% after implementing BNPL, especially on higher-ticket categories like furniture, electronics, and fashion. Customers feel less guilty about spending more when they can spread the cost.

Stronger Appeal to Gen Z and Millennial Shoppers

Younger demographics prefer installment payments over traditional credit. According to a 2024 PYMNTS study, over 50% of Gen Z consumers prefer BNPL to credit cards. This aligns with their spending habits—they want transparency, fixed payments, and no surprise interest charges.

If your customer base skews younger, BNPL isn't optional. It's the payment method they're actively looking for. Not offering it means they might abandon your cart and buy from a competitor who does.

Faster Cash Flow for Your Business

Here's the part that matters most to your CFO: merchants receive full payment from the BNPL provider immediately, even though customers pay over time. This improves working capital significantly, especially for businesses managing inventory cycles or seasonal demand.

You get paid today. The BNPL provider assumes the risk. Your customer pays over time. Everyone wins.

BNPL Trends Reshaping Shopify Commerce

The BNPL landscape in 2025 looks different than it did even 18 months ago. Here are the trends actually changing how merchants operate.

Expansion Beyond Retail into Services and B2B

BNPL is moving beyond traditional consumer goods. Subscription services, digital products, professional services, and even wholesale transactions now support installment payments. This matters particularly for Shopify Plus merchants managing B2B storefronts or mixed business models.

Educational platforms are offering BNPL for course enrollments. SaaS companies are using it for annual subscriptions. Wholesale buyers are splitting large orders into manageable payments. If you're selling anything with a price point above $100, BNPL probably makes sense regardless of your category.

Mobile-First Checkout Experiences

Over 70% of ecommerce traffic now comes from mobile devices, and BNPL providers know it. The latest integrations prioritize streamlined approval flows optimized for smaller screens. One-tap checkout options, biometric authentication, and pre-saved payment methods make mobile BNPL conversions nearly frictionless.

If your mobile checkout isn't optimized for BNPL, you're losing sales. The best implementations show installment pricing directly on product pages in mobile view, so customers see payment flexibility before they even add to cart.

AI-Powered Instant Approvals and Personalization

Providers now use machine learning for real-time credit decisions and personalized payment plan recommendations. Instead of offering everyone the same "pay in 4" option, AI analyzes purchase history, cart value, and customer behavior to suggest the most relevant terms.

This means faster approvals (often under 5 seconds) and higher approval rates. Customers who might have been declined before now get approved for shorter terms or smaller maximums, expanding your addressable market.

Growing Regulatory Scrutiny and Responsible Lending Standards

The BNPL industry is facing increased oversight globally. The Consumer Financial Protection Bureau has issued guidance treating BNPL more like traditional credit, and similar regulations are emerging in Europe, Australia, and Canada.

For merchants, this means choosing compliant providers matters more than ever. Look for providers with transparent terms, clear fee disclosures, and responsible lending practices. Your BNPL provider's reputation affects your brand—if they engage in predatory practices, it reflects on you.

Deeper Integration with Digital Wallets

BNPL is merging with Apple Pay, Google Pay, and Shop Pay for seamless omnichannel experiences. Instead of being a separate checkout option, installment payments now work through the digital wallets customers already use.

This convergence matters because it reduces friction. A customer can use Apple Pay with BNPL built in, getting both the convenience of saved payment methods and the flexibility of installment payments in one tap.

How BNPL Increases Conversion Rates and Average Order Value

Understanding the mechanics behind BNPL's impact helps you optimize implementation. Here's what's actually happening when you add flexible payments:

Reduced sticker shock: Displaying installment pricing makes higher-priced items feel accessible. A $800 monitor feels expensive. "$200 every two weeks" feels manageable. It's the same total cost, but the psychological barrier drops significantly. This is especially powerful on product pages where customers are still evaluating whether to buy.

Lower abandonment: Customers who hesitate at full price often complete checkout with BNPL. Cart abandonment happens for dozens of reasons, but price sensitivity ranks near the top. BNPL directly addresses this by making the immediate financial commitment smaller. You're not changing your prices—you're just presenting them in a way that feels more achievable.

Upsell opportunities: Shoppers feel comfortable adding items when spreading costs. This is where AOV growth really happens. A customer budgeting $50 might stretch to $100 if they can split it into four payments. They add that extra shirt, upgrade to the deluxe version, or throw in accessories they'd normally skip. The math works because the immediate cost stays within their comfort zone even as the total increases.

Best BNPL Apps for Shopify Stores

The Shopify App Store includes several major BNPL providers, each with different strengths. Here's how they compare:

ProviderBest ForKey DifferentiatorShop Pay InstallmentsNative Shopify integrationSeamless checkout, no redirectKlarnaInternational reachAvailable in multiple countries and currenciesAfterpayFashion and lifestyle brandsStrong millennial and Gen Z user baseAffirmHigher-ticket itemsLonger repayment terms availablePayPal Pay LaterExisting PayPal usersTrusted brand, broad customer familiaritySezzleYounger shoppersNo credit check for most approvals

Shop Pay Installments

Shopify's native BNPL solution offers the smoothest integration. There are no redirects, no separate provider accounts, and no additional checkout steps beyond what customers already experience with Shop Pay. If your store already uses Shop Pay, adding installments is literally a toggle in your settings.

The limitation is geographic availability—Shop Pay Installments only works in certain markets. But where it's available, it's typically the best option for seamless user experience.

Klarna

Popular globally with flexible payment options including pay-in-four and longer financing terms. Klarna has built a strong consumer app ecosystem where shoppers can manage all their purchases, track deliveries, and discover new brands.

Klarna works particularly well for international merchants. They support multiple currencies and have strong brand recognition across Europe, North America, and expanding markets in Asia-Pacific.

Afterpay

Well-established with fashion and lifestyle merchants. Afterpay offers co-marketing opportunities through their merchant directory and app, giving you exposure to their active shopper base. They've built a loyal following among younger consumers who check the Afterpay app specifically to find new brands.

The trade-off is slightly higher transaction fees compared to some competitors, but many fashion brands find the customer acquisition value justifies the cost.

Affirm

Suited for higher-value purchases with longer repayment windows. Where other providers max out at 6 weeks, Affirm offers terms up to 36 months for larger purchases. This makes them ideal for furniture, appliances, electronics, and other big-ticket items where customers need true financing, not just short-term installments.

Affirm is transparent about interest rates—when financing terms include interest, customers see it clearly before checkout. This builds trust even when customers are paying more than the sticker price.

PayPal Pay Later

Leverages existing PayPal trust and user base. Over 400 million people already have PayPal accounts, making adoption nearly instant. If you're already processing PayPal payments, adding Pay Later requires minimal additional setup.

The downside is less flexibility in how you display BNPL messaging compared to purpose-built providers, but the convenience factor often outweighs this limitation.

Sezzle

Appeals to budget-conscious and younger shoppers. Sezzle offers credit-building features and flexible reschedule options, positioning themselves as a more consumer-friendly option for shoppers managing tight budgets.

Approval rates tend to be higher than competitors because Sezzle focuses on smaller transaction sizes and shorter terms. This makes them particularly good for stores with AOVs under $200.

How to Evaluate BNPL Providers for Your Shopify Store

Choosing the right provider requires looking beyond marketing claims. Here's what actually matters:

Transaction Fees and Pricing Models

Fees vary significantly by provider and volume. Most charge a percentage of each transaction (typically 2-8%) plus potential flat per-transaction costs. Higher-volume merchants can often negotiate better rates.

Don't just compare the advertised percentage. Look at the full cost structure: monthly minimums, chargeback fees, integration costs, and any additional charges for premium features like enhanced analytics or co-marketing programs.

Customer Approval Rates

Higher approval rates mean more customers can use BNPL, directly impacting your conversion lift. Approval rates vary from 60% to over 90% depending on the provider, their risk models, and your customer demographic.

Ask providers about typical approval percentages for stores similar to yours. A provider with lower fees but significantly lower approval rates might cost you more in lost sales than a slightly more expensive option with better approval rates.

Ease of Shopify Integration

Native App Store integrations are simplest. They install with one click, connect to your existing checkout, and require no custom development. Check whether the provider requires theme modifications, creates separate payment flows, or redirects customers off-site during approval.

Off-site redirects harm conversion rates, especially on mobile. The best integrations happen entirely within Shopify's checkout without ever sending customers to another domain.

Geographic and Currency Availability

Confirm the provider supports your target markets. Not all BNPL apps work internationally or with multiple currencies. If you sell to customers in Canada, the UK, and Australia, you need a provider that operates in all three regions—or you might need multiple providers.

Currency conversion handling matters too. Some providers display installment amounts in the customer's local currency automatically, while others show everything in your store's base currency, creating confusion.

Merchant Support and Marketing Resources

Some providers offer co-branded marketing materials, directory listings where their customers discover new merchants, and dedicated account support. These extras can significantly impact your BNPL adoption rate and overall program success.

Marketing support typically includes email templates, social media assets, and website badges you can customize for your brand. Directory listings give you exposure to millions of active BNPL users actively shopping through provider apps.

How to Add BNPL to Your Shopify Checkout

Implementation is straightforward if you follow these steps:

1. Select the Right BNPL Provider for Your Business

Reference the evaluation criteria above. Consider your average order value, customer demographics, and geographic reach. A fashion brand targeting Gen Z might prioritize Afterpay or Klarna, while a furniture store with $2,000+ AOV should look at Affirm's longer-term financing.

Don't just pick the most recognizable name. The right provider aligns with how your customers actually want to pay.

2. Install and Configure the Shopify App

Most providers offer one-click installation from the Shopify App Store. Search for your chosen provider, click "Add app," and follow the setup wizard to connect your account. You'll typically need to provide business verification documents and banking information for settlements.

The setup process usually takes 10-30 minutes depending on provider requirements. Some approve merchants instantly, while others require 1-3 business days for underwriting.

3. Customize Payment Settings and Branding

Adjust where BNPL messaging appears across your store. Best practice is showing installment options on product pages, in cart, and at checkout. Align visuals with your store branding so BNPL feels like a natural part of your payment experience rather than a tacked-on afterthought.

Most apps let you customize colors, button text, and messaging prominence. Test different configurations to find what resonates with your customers.

4. Test the Full Checkout Experience

Place several test orders to verify the BNPL option displays correctly and the approval flow works smoothly across devices. Test on both desktop and mobile, using different browsers and network conditions.

Pay attention to how installment pricing displays, whether redirects feel seamless, and how clearly terms are communicated. If anything feels confusing during testing, your customers will be confused too—fix it before going live.

5. Launch and Track Performance Metrics

Monitor conversion rates, average order value, and BNPL adoption rates closely in the first few weeks. Use both Shopify analytics and your BNPL provider's dashboard to measure impact. Understanding your ecommerce metrics helps you optimize checkout experiences and maximize ROI from new payment options.

Track specific cohorts: new customers versus returning, mobile versus desktop, different product categories. BNPL often performs differently across segments, and understanding these patterns helps you optimize messaging and placement.

Strategies to Promote BNPL and Boost Sales

Adding BNPL isn't enough—you need to actively promote it to drive adoption.

Display BNPL Messaging on Product Pages

Show installment pricing directly on product pages so customers see payment flexibility before reaching checkout. This is particularly powerful for higher-priced items where customers need reassurance they can afford the purchase.

Format matters. "As low as $25/mo" works better than just showing a BNPL logo. Make the math clear and immediate.

Feature Installment Options in Email Marketing

Include BNPL callouts in promotional emails, abandoned cart sequences, and product announcements. When remarketing to cart abandoners, installment pricing can be the nudge that brings them back.

Test subject lines mentioning payment flexibility. "That $200 jacket is just $50/mo" often outperforms generic promotional copy.

Highlight Payment Flexibility at Checkout

Make BNPL visually prominent during checkout. Many merchants report the checkout page drives the highest BNPL adoption because it's the moment of financial commitment. Clear messaging reduces friction for undecided shoppers.

Consider adding trust signals like "0% interest" or "No hidden fees" near BNPL options to address common concerns.

Leverage BNPL Provider Co-Marketing Programs

Many providers offer merchant directories where their customers discover new brands, social media features highlighting participating merchants, and joint marketing campaigns. These free exposure opportunities can drive significant traffic.

Some providers also offer seasonal promotions where they incentivize customers to shop with participating merchants. Make sure you're enrolled in these programs—they're typically free and can generate substantial sales during peak seasons.

Regulatory and Compliance Considerations for BNPL on Shopify

The regulatory landscape around BNPL is tightening globally. Regulations vary by region and are evolving quickly, with government agencies increasingly treating BNPL products similarly to traditional credit.

Here's what Shopify merchants need to know:

Disclosure requirements: BNPL providers must clearly communicate payment schedules, any fees, and consequences of missed payments. These disclosures need to happen before customers commit to the purchase. Make sure your chosen provider displays terms prominently and in plain language.

Consumer protection laws: Some jurisdictions now classify BNPL as credit, triggering additional regulations around responsible lending, affordability assessments, and credit reporting. The UK's Financial Conduct Authority is implementing comprehensive BNPL regulation, and similar frameworks are emerging in the EU and Australia.

Merchant responsibility: While BNPL providers handle compliance for their lending products, merchants share responsibility for how payment options are presented. Choose providers with transparent practices to protect your brand reputation. If your BNPL partner engages in predatory lending or unclear terms, customers will associate those practices with your brand.

Stay informed about regulations in your target markets. The Consumer Financial Protection Bureau announced rules requiring BNPL providers to report data similar to credit card companies, signaling more scrutiny ahead.

The Future of BNPL on Shopify

BNPL is settling into its role as a permanent fixture of ecommerce checkout rather than a passing trend. Expect continued growth, deeper platform integrations, and convergence with other payment technologies.

The most likely evolution is increased standardization. As regulation catches up to the industry, BNPL providers will operate under clearer rules with more consistent consumer protections. This benefits reputable merchants by weeding out predatory providers that damage the entire category's reputation.

Integration with digital wallets will deepen. The distinction between "paying with Apple Pay" and "using BNPL through Apple Pay" will blur as installment options become standard features rather than separate checkout flows.

B2B adoption will accelerate. Wholesale and trade customers want payment flexibility just as much as consumers, and BNPL providers are building products specifically for business purchases. If you operate a Shopify Plus store with B2B functionality, expect more options in this space soon.

According to Worldpay's Global Payments Report, BNPL is projected to grow to nearly 7% of global ecommerce payment volume by 2027. This isn't a niche payment method anymore—it's table stakes for competitive checkout experiences.

How to Build an Accessible and Compliant Shopify Checkout

Adding payment options like BNPL increases checkout complexity, which can introduce accessibility barriers for customers using screen readers, keyboards, or other assistive technologies. A fully accessible checkout ensures all customers can complete purchases, regardless of ability.

Accessibility isn't just about compliance with the Americans with Disabilities Act—it's about removing barriers that prevent customers from buying. When your checkout works seamlessly for people using assistive technology, you capture sales you'd otherwise lose.

Common accessibility issues with BNPL implementations include:

• Installment pricing information not properly announced by screen readers
• Payment provider selection buttons that can't be activated via keyboard
• BNPL approval flows that break keyboard navigation
• Pop-ups or modals without proper focus management
• Installment terms displayed only as images without text alternatives

These problems compound when customers face multiple barriers in a single checkout flow. A screen reader user might successfully navigate to checkout, encounter an inaccessible BNPL selection interface, and abandon their cart entirely—not because they didn't want to use installment payments, but because the interface wouldn't let them.

Complete Shopify accessibility requires attention to checkout flows, payment integrations, and third-party apps. TestParty helps Shopify merchants maintain accessible, compliant stores with automated monitoring and expert remediation. We duplicate your theme, apply accessibility fixes directly to source code, and scan daily to catch new issues before they impact customers.

Your checkout accessibility directly affects revenue. Don't let implementation complexity create barriers that prevent customers from completing purchases.

Book a demo to see how TestParty keeps your Shopify checkout accessible as you add new payment options and functionality.

FAQs about Buy Now Pay Later on Shopify

What are the drawbacks of buy now pay later for Shopify merchants?

Merchants pay transaction fees to BNPL providers, typically ranging from 2-8% depending on provider and volume. These fees are higher than standard credit card processing. Some providers also have opaque fee structures or chargeback policies that require careful review before signing up. Additionally, training your support team to answer customer questions about installment payments adds operational overhead.

Does using BNPL affect a customer's credit score?

Most BNPL providers perform soft credit checks that do not impact credit scores. However, missed payments may be reported to credit bureaus depending on the provider and jurisdiction. Some providers are beginning to report positive payment history to help customers build credit, while others don't report to bureaus at all. Customers should check their specific provider's credit reporting policies.

Can Shopify merchants offer BNPL to international customers?

Availability depends entirely on the provider. Some BNPL apps support multiple countries and currencies, while others are limited to specific regions. Klarna and Afterpay have strong international coverage, while Shop Pay Installments and Affirm are currently US-focused with limited expansion. Check each provider's geographic availability before implementation if you serve international customers.

What happens when a customer misses a BNPL payment?

The BNPL provider handles collections, not the merchant. Merchants still receive their full payment upfront, so customer defaults do not directly affect store revenue. However, widespread defaults could lead providers to tighten approval criteria, potentially reducing your future approval rates. Providers typically charge late fees to customers and may restrict future purchases until accounts are brought current.

How does BNPL compare to offering store credit or layaway programs?

BNPL provides instant gratification since customers receive products immediately, unlike layaway where items ship only after full payment. Unlike store credit, BNPL is managed by a third party, reducing administrative burden for merchants. You don't have to track payments, manage collections, or carry accounts receivable on your books. The trade-off is transaction fees, but for most merchants, outsourcing payment management is worth the cost.