Buy now, pay later (BNPL) is more than just a modern twist on layaway. Shoppers love the flexible payment method as a way to avoid credit cards and manage their cash flow. And merchants of every size are driving more sales by offering pay-over-time options to their customers.

The opportunity for merchants keeps growing: Today’s market for BNPL is expected to double by 2024, representing more than $100 billion in sales. As more shoppers opt for buy now, pay later, your business can get a piece of the action by partnering with a BNPL provider like Affirm that can make these transactions frictionless for you. (See this post for a refresher on what is buy now, pay later and how shoppers use it.)

These 5 questions can help you evaluate which BNPL provider is best for your business.

1. Does the buy now, pay later solution work for my type of business?

Does the provider have a successful track record of working with businesses in your industry that are a similar size as yours? Large merchants, for example, will want to make sure a BNPL provider can accommodate their sales volume, especially during peak cycles, without crashing. Small businesses should consider the ease of implementing and managing the BNPL solution so it doesn’t overwhelm their human resources. Also find out if the provider is familiar with the nuances of your retail category, whether it’s apparel, home furnishings, travel, auto servicing, and more. 

If you have both online and brick-and-mortar stores, you’ll want to consider a provider who has omnichannel capabilities. For an e-commerce business, you should check if the provider offers a direct tech integration with your platform that’s easy to implement. Or check to see if the provider has an existing partnership with your e-commerce, web hosting, checkout, or other platforms that could make offering BNPL to your customers as simple as a few clicks.

2. What impact will BNPL have on my bottom line?

Many businesses that offer pay-over-time options to their customers see gains in cart conversion, average order value (AOV), and customer acquisition, according to a recent McKinsey report. What’s more, RBC Capital Markets estimates that adding BNPL to your checkout can increase conversion 20–30%. And Wix, a global leader in website creation, says that stores on its e-commerce platform that offer BNPL at checkout “have 97% more orders than average.”

Offering shoppers the option to pay over time can also increase incremental sales. Research from Affirm user studies shows that many shoppers would have abandoned their carts if Affirm wasn’t available:

• 45% said they would have delayed their purchase.

• 29% would not have completed their purchase.

• 5% would have made their purchase elsewhere.

Leading online travel agency Priceline confirmed a similar result. “Using our A/B testing platform, we’ve proven we’re getting incremental new customers who wouldn’t have booked with us if we didn’t offer Affirm. So that’s the biggest benefit—growth in the business,” said Jacobus Kok, Product Director at Priceline.

All of the possible benefits mentioned above can help you assess what kind of return on investment (ROI) you’ll get from partnering with a BNPL provider.

3. How can BNPL expand my customer base?

In addition to the Priceline example, pay-over-time options can attract new customers in a variety of ways. Several BNPL providers, including Affirm, have shopping apps with millions of members who are active shoppers. And downloads of these apps have exploded in the last 2 years.

When you partner with one of these BNPL providers, you can appear in their app as a participating merchant and gain exposure to potential new customers. It can be as simple as showing up in search results, or you may secure a featured placement or promotion in the app that drives a surge of new traffic to your site. The Affirm app, for example, offers a personalized experience and other features that have delivered higher conversion rates as well as new and repeat customers to our merchant partners.

But you can also gain new customers simply by displaying a BNPL option on your product pages. In fact, 57% of BNPL users learned about the payment option from the product page of an item they purchased online, according to a PYMNTS research report. And nearly 6 in 10 shoppers also said they would use a BNPL option if it were offered by a third-party provider like Affirm.

Many BNPL providers can also integrate seamlessly into your checkout experience, which minimizes the risk of losing customers due to friction at checkout.

4. Is the BNPL solution flexible enough to engage the most customers?

To accurately answer this question, you’ll want to look at the provider’s suite of merchant solutions and cart sizes they can accommodate. Some providers only offer a plan that splits purchases into 4 payments that are due every two weeks. And some set a limit for cart sizes that prevents shoppers from using BNPL for expensive items like high-tech fitness equipment or luxury fashion. 

You can also research what types of promotional levers a BNPL provider can help with, like extending 0% APR offers to your customers during peak sales events. Or customizable marketing assets you can use to easily reach all types of customers through campaigns and other promotions.

As technology continues to improve e-commerce, look for a provider that often innovates to reduce friction at checkout, accelerate time to purchase, and tailor BNPL options so shoppers can pay how they want. One example of this is Adaptive CheckoutTM from Affirm. This solution uses proprietary technology to customize options for how shoppers can pay over time, with terms proven to boost conversion, reach new customers, and grow sales.

5. How can a BNPL solution help me retain customers?

As BNPL usage grows, shoppers are discovering that this flexible form of payment is easy to use, helps them avoid credit card debt and fees, and lets them manage their personal cash flow. Of shoppers who’ve used this payment method, nearly half (48%) said they would not buy from a merchant that doesn’t offer a pay-over-time option. So just offering BNPL to your customers can give you an advantage for repeat business.

Delivering repeat business is a value standard for many BNPL providers, and they usually promote it. Affirm drives an average 20% repeat purchase rate for merchant partners. 

But other factors can also enhance loyalty from your customers. If a shopper has a bad experience with a BNPL provider that you’re working with, it may reflect poorly on your business. That’s why it’s important to research a provider’s policies on hidden fees, interest payments, and late fees. The fewer surprises, the better.

And if the BNPL provider enhances a customer’s experience, the upsides for retention grow even more—as Luan Nuriu, Service Director at Audi Coral Springs, discovered after implementing Affirm:

“When people see what we’ve been able to do for their car and then offer them a flexible way to pay, they think we’re heroes!”

Learn more about how Affirm can help increase sales for your business.