There is a lot to consider when adding a new payment method. Buy now, pay later (BNPL) is no exception. So what questions should retailers ask before adopting BNPL, asks’s Renee Howard.

Buy now, pay later (BNPL)  is booming. Our data finds that in Europe, 53% of consumers are planning to use BNPL this year, joining the 23% who already have.

This adoption, combined with the business benefits of BNPL — increased conversion, acquisition and order value — make it a compelling proposition for retailers. Yet, it is vital retailers also consider the costs as well as the benefits before adopting BNPL.

Here are some questions to ask to help make a decision. 

1. What are the fees – and how quickly will these be offset? 

It’s vital to understand the impact of BNPL on sales so you can forecast what any resulting transaction fees will cost your business.

Make sure you know the tipping point at which BNPL starts to pay for itself and give yourself a deadline to reach it.

If you’re not confident that sales will offset the cost, perhaps your business is not yet at the scale that warrants it.

2. What BNPL plan will work best for your product price points and will you need any additional accreditation?

There are several different types of BNPL. Generally, if it’s interest-free over three or four instalments, it’s unlikely to fall under credit regulation — for example, Klarna or Tamara.

If you sell expensive items and need to offer longer-term financing, you may need a pay-by-finance BNPL that involves applying for a credit licence. Make sure you allow for this in your planning. 

3. Is offering BNPL likely to drive higher customer returns? Are you operationally ready to manage this? 

Some sectors, such as fashion, may see a rise in returns from customers choosing to try at home before buying.

BNPL makes it easy for them to purchase items in multiple sizes or colours. They can return unwanted items without paying or waiting for a refund.

This is more likely if you offer a free return service. 

4. Does BNPL appeal to your target customer demographic?

BNPL provider Klarna says that 70% of its customers are Gen Z or millennials and Afterpay reports the average age of its customers as 33.

Research your target demographic and ensure that your business would benefit from offering BNPL at the checkout.

Renee Howard is senior technical product marketing manager at

Howard is passionate about simplifying the ever-complex payments ecosystem. Renee has over seven years of payments experience and is an active member of the MRC and advocates for bringing more diversity into the payments industry. When she is not geeking out over payments, you can find her walking her dog to the nearest coffee shop.