The Benefits of Buy Now, Pay Later Options

by Connor Dunn
March 24, 2022

Pay later options have exploded over the past two years. The name is an accurate description of the concept- buy your product now, pay for it later. Most buy now, pay later (BNPL) companies offer a 4 part installment series for the payments, spread evenly across the pay periods. While the majority of online stores have already adopted the buy now, pay later options, more brick and mortar stores are beginning to adopt the practice as well. 

Once you’ve added an item to your cart and proceeded to checkout, an option for BNPL will appear. The application for a BNPL option is a very simple process. It asks for basic background information- name, address, phone number, payment method, etc. Some companies perform a quick credit check (which doesn’t impact your credit score), and within moments you’re approved. A low credit score may have some impact on your eligibility, but this option is available for almost everyone. 

The most common payment plan is the “pay in 4” plan. All 4 payments will be equal and due equal time apart- typically every two weeks. For example, a $400 dollar purchase following the pay in 4 plan would require $100 at checkout, then $100 every two weeks until the payment is complete. If you miss a payment, most companies give you a grace period of 10 days. If the payment is still missing, late fees may be instituted on your purchase. Late fees vary by company- the ones that do have it, usually have fees around $8, maxing at 25% of the order value. 

BNPL opponents worry about the simplicity of adding debt with payment plans, with valid reason. Going back to the previous example: the $400 purchase only requires $100 at checkout, which leaves you with $300 to pay the rest back. However, because of the payment plan length, concerns have arisen that it becomes easier to buy more with money in your account- despite it being allotted elsewhere. BNPL essentially acts as a credit card, allowing you to purchase without paying full at checkout. If you follow the payment plan on-time and in full, buy now, pay later is a great tool for consumers. 

Klarna is one of the biggest names for BNPL options. Major companies such as Amazon and Nike offer Klarna as an option to use as payment, along with hundreds of other sites. Klarna’s pay in 4 option is used across a multitude of industries, as it provides massive benefits to both consumer and business. While most brands’ online stores offer Klarna on site, Klarna has taken the idea a step further and developed their own app. The Klarna app is a centralized platform containing all of your Klarna information, as well as access to curated marketplaces based on your purchasing preferences and history. Instead of searching through different websites and hoping they offered BNPL options, Klarna collected all of the brands they used and created their own buying hub. 

BNPL options have become more and more common with companies such as Klarna leading the way. Within the last week, Klarna has begun offering BNPL options at participating gas stations throughout the country- allowing yet another way for consumers to use BNPL. BNPL options are even being used for medical or travel expenses, which can be very helpful to consumers as those industries typically have a higher cost than everyday purchases. Having partnered with Klarna, we see the benefits of buy now, pay later options daily, with full expectation for BNPL to grow even more this year.

ABOUT THE AUTHOr
Connor Dunn is Fifty Six’s Business Development Coordinator. While Connor considers himself fun and laid-back, he brings the energy to everything he does. Living in multiple cities has helped him gain tremendous insight into different perspectives, which he tries to bring to every challenge he faces. He might be a “have a good time” kind of guy, but don’t let it fool you- between the lines or in the workplace, his drive to be successful trumps all. @connordunn35
BACK TO FINDINGS

The Benefits of Buy Now, Pay Later Options

by Connor Dunn
March 24, 2022

Pay later options have exploded over the past two years. The name is an accurate description of the concept- buy your product now, pay for it later. Most buy now, pay later (BNPL) companies offer a 4 part installment series for the payments, spread evenly across the pay periods. While the majority of online stores have already adopted the buy now, pay later options, more brick and mortar stores are beginning to adopt the practice as well. 

Once you’ve added an item to your cart and proceeded to checkout, an option for BNPL will appear. The application for a BNPL option is a very simple process. It asks for basic background information- name, address, phone number, payment method, etc. Some companies perform a quick credit check (which doesn’t impact your credit score), and within moments you’re approved. A low credit score may have some impact on your eligibility, but this option is available for almost everyone. 

The most common payment plan is the “pay in 4” plan. All 4 payments will be equal and due equal time apart- typically every two weeks. For example, a $400 dollar purchase following the pay in 4 plan would require $100 at checkout, then $100 every two weeks until the payment is complete. If you miss a payment, most companies give you a grace period of 10 days. If the payment is still missing, late fees may be instituted on your purchase. Late fees vary by company- the ones that do have it, usually have fees around $8, maxing at 25% of the order value. 

BNPL opponents worry about the simplicity of adding debt with payment plans, with valid reason. Going back to the previous example: the $400 purchase only requires $100 at checkout, which leaves you with $300 to pay the rest back. However, because of the payment plan length, concerns have arisen that it becomes easier to buy more with money in your account- despite it being allotted elsewhere. BNPL essentially acts as a credit card, allowing you to purchase without paying full at checkout. If you follow the payment plan on-time and in full, buy now, pay later is a great tool for consumers. 

Klarna is one of the biggest names for BNPL options. Major companies such as Amazon and Nike offer Klarna as an option to use as payment, along with hundreds of other sites. Klarna’s pay in 4 option is used across a multitude of industries, as it provides massive benefits to both consumer and business. While most brands’ online stores offer Klarna on site, Klarna has taken the idea a step further and developed their own app. The Klarna app is a centralized platform containing all of your Klarna information, as well as access to curated marketplaces based on your purchasing preferences and history. Instead of searching through different websites and hoping they offered BNPL options, Klarna collected all of the brands they used and created their own buying hub. 

BNPL options have become more and more common with companies such as Klarna leading the way. Within the last week, Klarna has begun offering BNPL options at participating gas stations throughout the country- allowing yet another way for consumers to use BNPL. BNPL options are even being used for medical or travel expenses, which can be very helpful to consumers as those industries typically have a higher cost than everyday purchases. Having partnered with Klarna, we see the benefits of buy now, pay later options daily, with full expectation for BNPL to grow even more this year.

ABOUT THE AUTHOr
Connor Dunn is Fifty Six’s Business Development Coordinator. While Connor considers himself fun and laid-back, he brings the energy to everything he does. Living in multiple cities has helped him gain tremendous insight into different perspectives, which he tries to bring to every challenge he faces. He might be a “have a good time” kind of guy, but don’t let it fool you- between the lines or in the workplace, his drive to be successful trumps all. @connordunn35
BACK TO FINDINGS