Best Installment Payment and Buy Now Pay Later (BNPL) Software
Installment payment and buy now pay later (BNPL) software facilitates a business’ ability to offer customers the option to purchase products and services over time through a set number of regular payments. Businesses embed these solutions into their online store or integrate them with their invoicing software to offer flexible payment options. Because of the flexibility associated with installment payments, these solutions enable a business to potentially attract new customers and sell more high-priced items within their e-commerce store. This type of software can also benefit marketplace providers such as Etsy or eBay, which use BNPL to allow their sellers to receive installment payments.
These tools need to integrate with e-commerce platforms to provide options for installment payment at checkout and with payment gateways to process payments. Furthermore, all payment data needs to be transferred to financial systems, which requires integration with accounting software.
To qualify for inclusion in the Installment Payment and Buy Now Pay Later (BNPL) category, a product must:
Best Installment Payment and Buy Now Pay Later (BNPL) Software At A Glance
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PayPal Payments is a comprehensive payment processing solution designed to empower businesses of all sizes to accept payments seamlessly from customers worldwide. By integrating PayPal Payments, merch
1,109,307 Twitter followers
Sunbit is the AI-powered finance partner that turns hesitation into sales. Traditional financing slows things down and drives customers away. Sunbit’s people-centered AI approves the majority of ap
470 Twitter followers
Affirm’s mission is to deliver honest financial products that improve lives. By building a new kind of payment network – one based on trust, transparency and putting people first – we empower millions
19,771 Twitter followers
Zip (previously Quadpay) is a leading Buy Now, Pay Later company providing fair and seamless solutions that simplify how people pay. With a growing presence across the globe, our mission is to be the
Based in Minneapolis, Minnesota, Sezzle is a public-benefit corporation on a mission to financially empower the next generation. Sezzle’s #1-shopper-rated Buy Now, Pay Later product enables millions o
20,373 Twitter followers
Afterpay pioneered a better way to pay. Customers shop now, pay over 6 weeks, and never pay interest. Merchants who partner with Afterpay reach the largest, most loyal shoppers in the world. More tha
30,668 Twitter followers
GoCardless is on a mission to become the world’s bank payment network. Setting people and businesses free from the frustrations and cost of out-dated payment methods, with simple and secure direct ban
13,228 Twitter followers
Klarna is a global fintech company that offers innovative payment and marketing solutions designed to enhance the shopping experience for consumers and drive growth for businesses. By providing flexib
64,112 Twitter followers
Wisetack is the leading Pay Over Time platform for in-person services. Wisetack partners with top SaaS service companies to embed payment options directly into their software through a simple API inte
202 Twitter followers
Capchase Pay is a B2B payment and financing solution designed to improve the buying and selling of software and hardware by streamlining the payment process. This innovative platform allows customers
2,433 Twitter followers
PayBright is Canada’s leading solution for instant financing of e-commerce purchases. With PayBright, e-commerce merchants using SAP Commerce can offer instant financing as a new integrated payment me
19,771 Twitter followers
We’re changing how you shop Shopping should be all fun, no stress. With Tamara, you can split your payments – totally interest-free.
4,351 Twitter followers
Credit Key is the leading B2B payments company that simplifies and enhances the purchasing process through its proprietary digital platform. Hundreds of leading merchants leverage Credit Key to offer
96 Twitter followers
Magento 2 Partial Payment by Meetanshi lets customers make a purchase with installment payments, layaway price plans, EMIs, etc. Do you want to implement a payment option which can be helpful in b
775 Twitter followers
ViaBill is changing the way people shop online. We offer a payment solution that empowers shoppers to have the freedom of choice by allowing them to buy now and pay in easy monthly installment with 0%
1 Twitter followers
Learn More About Installment Payment and Buy Now Pay Later (BNPL) Software
What is Installment Payment and Buy Now Pay Later (BNPL) Software?
Installment payment and buy now pay later (BNPL) software allows companies to provide their customers with the option to pay for goods and services in multiple parts (usually known as installments). Most of these transactions are interest-free, and the companies using this type of software pay a fee per transaction.
There is usually a minimum order amount per transaction, which varies by provider, and the first installment is due at checkout. BNPL service providers may charge fees or apply interest up to 30% per year for late payments.
While buyers can pay in monthly installments, companies usually receive the total amount immediately from the BNPL provider. These providers are only sometimes responsible for their financial services, which is why banks and financial institutions usually back them.
What Does BNPL Stand For?
BNPL stands for buy now pay later, also known as installment payments.
What Types of Installment Payment and Buy Now Pay Later (BNPL) Software Exist?
Depending on the type of buyer, there are two major types of BNPL software.
Business to consumer (B2C)
Most BNPL solutions focus on e-commerce and consumers (or individual buyers) in industries such as CPG and retail. Companies providing services to individuals, such as gyms and spas, may also use BNPL. Finally, companies selling subscription-based products such as meal kits allow consumers to pay in multiple installments.
Business to business (B2B)
B2B services and software as a service (SaaS) are the most common B2B use cases for BNPL. However, this payment type is less common for industrial goods and raw materials due to the risks associated with these transactions. These risks are related to the high value of payments and contractual obligations.
What are the Common Features of Installment Payment and Buy Now Pay Later (BNPL) Software?
The following are some core features within installment payment and BNPL tools that can help users define and implement installment plans for buyers:
Installments: These features define payment plans of monthly installments, made available to online buyers at checkout, either online or in-store. A typical payment plan includes four installments or fewer, which must be paid relatively quickly (between 4 and 6 weeks). In addition, some providers offer options for long-term financing.
Payments: Pay later options aren’t available to everyone, and buyers may need to provide a credit score or consent to a credit check. Low credit scores may disqualify buyers or require a down payment. When approved, buyers can choose between multiple payment methods such as credit and debit cards, Paypal, etc. BNPL software also manages payments for refunds. When orders are canceled, buyers must be refunded the amount they paid in one or multiple installments.
Dispute management: Disputes arise when buyers are charged penalties or interest on late payments or unpaid balances. Other types of disputes managed using BNPL solutions are failed or incorrect payments. Any other issues, such as damaged products or incorrect deliveries, require additional software, such as e-commerce platforms or inventory management.
Analytics: Since companies don't charge buyers for using BNPL, they need to ensure that providing this option helps them sell more. Therefore, tracking metrics such as average order value, ideally segmented by the buyer, region, or consumer category, is critical.
Integration: BNPL software integrates with e-commerce platforms or accounting software through application programming interfaces (APIs) or plugins, allowing real-time data sync across multiple systems.
What are the Benefits of Installment Payment and Buy Now Pay Later (BNPL) Software?
The main benefits of an installment payment and BNPL platform are:
Increase sales: The ability to pay in multiple installments allows buyers to purchase goods or services even when they cannot afford them. It also provides the flexibility to spend a manageable amount at a time, which can be a competitive advantage for companies offering BNPL.
Improve buyer experience: BNPL software can help companies improve the customer experience by providing financing and flexible payment options. For example, B2B and B2C buyers prefer to buy from providers that allow them to pay in multiple installments, so they don't have to cover the full price upfront.
Who Uses Installment Payment and Buy Now Pay Later (BNPL) Software?
Two types of personas mainly use this type of software:
Sales: Sales teams implement BNPL to attract new buyers or to incentivize existing customers or consumers to buy more.
Marketing: Since BNPL can be a competitive advantage, marketing teams incorporate it into their campaigns to differentiate themselves from competitors.
What are the Alternatives to Installment Payment and Buy Now Pay Later (BNPL) Software?
Alternatives to installment payment and BNPL tools that can replace this type of software, either wholly or partially:
Payment gateways: Payment gateways may include functionality for BNPL, which benefits companies that must manage the complete payment process.
Software Related to Installment Payment and Buy Now Pay Later (BNPL) Software
Related solutions that can be used together with installment payment and BNPL include:
E-commerce platforms: BNPL solutions don't include features to create and maintain shopping carts, so they must integrate with e-commerce platforms.
Shopping cart software: Small companies may not need e-commerce platforms and use shopping cart tools instead. These tools must also integrate with BNPL software to track online sales and payments.
Billing and invoicing: Since payments are financial transactions, companies must track and report them for compliance. Also, billing data allows companies to monitor their profitability and cash flow.
Challenges with Installment Payment and Buy Now Pay Later (BNPL) Software
Installment payment and BNPL software solutions can come with the following challenges.
Lack of regulation: Installment payments are not new, but BNPL limits their number to four. In contrast, payment plans with five or more installments are usually regulated locally or nationally. There are very few regulations for four and fewer installment plans.
Overspending: While most BNPL options are interest-free, there are often hidden fees, such as late fees. Also, while there is no interest on payments, providers may apply high-interest rates on incomplete payments. These factors may contribute to overspending as consumers pay more than they were planning to at the initial purchase.
Incomplete payments: Buyers may not afford to pay all installments or simply forget, which may incur late fees or high interests applied to the unpaid balance. This may hurt buyers and their credit scores, and sellers that get paid late or never recover the total amount.
Which Companies Should Buy Installment Payment and Buy Now Pay Later (BNPL) Software?
Any company selling goods or services online or in-store can benefit from using BNPL software. Still, this type of software is primarily beneficial to:
E-commerce companies: BNPL is a perfect fit for e-commerce, focusing mainly on B2C sales with low value and high volume. Online stores provide the option to pay in multiple installments at checkout through integration with BNPL software.
Retailers: While retail companies often use BNPL for online stores, this software can also be used in-store at the point of sale (POS). The process is the same as for e-commerce, except that the credit or debit card owner must be present and provide valid identification.
Subscription services providers: Subscription products and services can also be purchased in multiple installments, even though this business model relies on monthly recurring payments. BNPL can help buyers purchase yearly or multi-year subscriptions, which cost less than monthly payments.
How to Buy Installment Payment and Buy Now Pay Later (BNPL) Software
Requirements Gathering (RFI/RFP) for Installment Payment and Buy Now Pay Later (BNPL)
BNPL software requirements can be generic or specific to the buyer. An example of generic requirements is the Payment Card Industry Data Security Standard (PCI DSS) certification, which is used worldwide by payment providers. On the other hand, a company's specific needs could be multi-currency for buyers selling in multiple countries with separate currencies.
Compare Installment Payment and Buy Now Pay Later (BNPL) Software Products
Create a long list
Buyers can create a long list by eliminating all the products that don't provide basic or critical requirements, such as multi-currency or support for multiple languages. So, for example, if a BNPL provider only supports the English language and US dollars, it should be automatically excluded from the long list of a multinational buyer.
Create a short list
Buyers can eliminate products from the long list to create a short list using advanced criteria. For instance, even though many BNPL solutions include multi-currency functionality, not all provide the option to automatically choose the currency based on the buyer's zip code. Another advanced feature is the ability to offer conversion rates for multiple currencies that can be updated in real-time or near real-time.
Conduct demos
Ideally, demos should simulate the BNPL process, either online or in-store. Vendors must show how their software supports payment and repayment options (such as debit and credit cards or PayPal) or how a buyer can register for installment payments at checkout.
The user experience is also important to demonstrate. A demo should show how easily BNPL users can provide financing options to buyers.
Selection of Installment Payment and Buy Now Pay Later (BNPL) Software
Choose a selection team
The selection team for BNPL software should include the departments in charge of e-commerce, in-store retail, B2B sales, and accounting.
Negotiation
The negotiation should consider that BNPL providers rely on partnerships to deliver features and integration. This means that buyers need to vet both BNPL vendors and their partners. They also need to understand the cost of the software and services vendors and partners provide.
Final decision
The winning solution should provide the features and benefits mentioned above at a reasonable price. It is also important that the vendor selling it and its partners have positive reviews, testimonials, and expertise in the industry.
