Buy now, pay later (BNPL) companies are increasingly used in ecommerce. These plans allow customers to split payments into fixed installments rather than pay the full amount at purchase.
BNPL apps are easy to use, and have low interest rates and fees, as well as credit limits that allow customers to make most common purchases. This makes them an attractive alternative to credit cards.
As a business owner, BNPL makes things easier for your customers and can increase your bottom line. With BNPL, you can offer your customers a simple way to pay for purchases while ensuring you receive the full amount immediately. Review the benefits popular BNPL companies offer so you can decide on the best one for the needs of your customers and your business.
Table of contents
What are buy now, pay later (BNPL) companies?
BNPL companies create and support an app-based form of payment you can find both online and in stores. In many ways, the BNPL model is similar to a credit card:
When a consumer buys products or services through the app, the business receives payment immediately, and the consumer makes equal payments over a set period (often without being charged interest).
BNPL loans offer customers the option to split the cost of large purchases over multiple installments.
For consumers, there are a number of advantages to using BNPL for payment. The repayment structure is simple and straightforward, and BNPL companies usually don’t charge interest or fees for users who pay on time. Additionally, most BNPL apps are easy to opt in to, and the approval process is straightforward.
A BNPL company might conduct a soft credit check on new users, which won’t affect a customer’s credit score. Due to its ease of use, experts expect BNPL to grow by 15.1% annually, reaching $258.4 billion in market value by 2031.
BNPL apps can be a winning situation for all involved. Consumers can finance purchases they might not otherwise have been able to afford, it reduces abandoned online shopping carts on ecommerce sites, and BNPL companies earn fees from the business for processing the transaction.
The buy now, pay later fine print
Unlike with credit cards, a buy now, pay later payment plan usually doesn’t require users to pay interest. And, consumers find they are generally easier to get approved for than credit cards, allowing them to make large purchases with interest free payments over time.
Taking advantage of a BNPL payment plan won’t affect a consumer’s credit score unless they miss a payment. Missing payments may also result in late fees, and result in a report with credit bureaus.
For businesses, risk is minimal, as chargebacks are often the responsibility of the buy now, pay later provider. As with any online payment method, BNPL loans can be at risk for fraud. Again, usually the buy now, pay later provider will be on the hook. However, good customer service practice dictates that you should take measures to prevent and detect fraud, and engage with customers who fall victim.
⚠️ Note: As with any contract, read the terms and conditions of any BNPL platforms you integrate with your website.
8 popular buy now, pay later companies
Using BNPL apps that have established reputations will remove some of the uncertainty for you and your customers. Here are the eight most popular.
1. Shop Pay Installments
Launched in 2021, Shop Pay Installments by Shopify is a convenient option for businesses already running their stores on the platform. It’s available for eligible stores in the United States, Canada, and the United Kingdom.
The facts
- Shop Pay Installments are offered by Affirm
- Consumers pay back their BNPL loan in four equal payments or monthly installments up to 12 months
- Businesses will be subject to an eligibility check and must have Shopify Payments and Shop Pay activated
Pros
- Increase average order value by up to 50%
- Up to 28% fewer abandoned carts
- Tap into Shop Pay’s base of more than 200 million users
- Consumers have flexible payment options: four installment payments or monthly financing plans up to 12 months
- Zero late fees for customers
Cons
- Shop Pay Installments is only available in specific countries
Who it’s for
- Shopify store owners in the US, Canada, and the UK who want an easy BNPL add-on with strong checkout conversion
2. Affirm
Founded in 2012, Affirm is available globally at more than 350,000 businesses, and financed over 31.3 million purchases in Q3 2025 alone.
The facts
- Interest: 0% to 36%, depending on the payment plan and user eligibility
- Loan term: Pay in 4 every two weeks, or pay monthly for up to 60 months
- Fees: No late/hidden fees, APR may apply
- Credit line: Up to $30,000; some loans may require a down payment
Pros
- Available both online and in-store
- Multiple repayment structures offer a wider range of options
- Businesses set their rates and repayment timelines
Cons
- Missed payments may affect users’ credit scores
- Most transactions require a credit check
- Some transactions charge interest
Who it’s for:
- Businesses that want more control over terms across online and in-store
3. Afterpay
Afterpay launched in Australia in 2014, before expanding to the US, New Zealand, Canada, and the UK (as Clearpay). Over 348,000 brands use Afterpay to reach more than 24 million customers with two payment methods: Pay in 4 and Pay Monthly.
The facts
- Interest: None for Pay in 4; Pay Monthly may charge APR/finance charges
- Loan term: Six weeks for Pay in 4, or pay monthly for up to 24 months
- Fees: Late fees are capped at the lesser of 25% or $68
- Spend limit: Often starts at around $600, but varies by user and market
Pros
- Encourages responsible spending for students and those who haven’t built up credit, bringing new consumers into the market
- Afterpay Card supports in-store purchases at participating retailers via Apple Pay/Google Pay
- A reminder feature helps users stay on track with payments
- Afterpay generally doesn’t report Pay in 4 to credit bureaus
Cons
- Pay Monthly is a loan product, and serious delinquency can harm credit
- Each purchase must be approved by Afterpay
- Not all purchases will be approved
- Late fees can be as high as 25% of the purchase amount
Who it’s for:
- Brands selling lower- to mid-ticket items to first-time credit users
4. Sezzle
Founded in 2016, Sezzle has three million consumers and processed $3.6 billion on the platform from September 2024 to 2025, according to its investors page. As a Public Benefits Corporation, it allows customers to reschedule payments for up to two weeks.
The facts
- Interest: None for Pay in 4; 5.99% to 34.99% for monthly plans
- Loan term: From two weeks to 48 months, depending on different factors
- Fees: Late payment fees, rescheduling fees, failed payment fees, convenience fees; other fees include service fees
- Credit line: Varies depending on the user
Pros
- Proven commitment to social and environmental standards
- Allows users to reschedule payments three times for up to two additional weeks
- Users can build credit with the Sezzle Up option, which reports on-time payments to credit bureaus
- Virtual credit card allows for in-store payments at select retailers
- Performs a soft credit check on users
- Three payment structures: Pay in 2, Pay in 4, and Pay Monthly
Cons
- Users are subject to many different fees
Who it’s for:
- Businesses that want multiple plan types and to give shoppers the option to build credit
5. PayPal Pay Later
PayPal is one of the most popular online payment processing platforms. As of August 2020, it also offers BNPL with millions of online businesses.
The facts
- Interest: Pay in 4 is interest-free, Pay Monthly is an interest-bearing installment loan, APR varies by credit and terms
- Loan term: Four payments over six weeks, or monthly up to 24 months
- Fees: None, but Pay Monthly can still have interest
- Credit line: $1,500 per transaction for Pay in 4; $10,000 for monthly payments
Pros
- Familiar brand name
- Easy to add for merchants and customers with existing PayPal accounts
- Integrated with the existing PayPal payment setup
- Covered by PayPal’s Purchase Protection, offering users an additional level of security on purchases
- Performs a soft user credit check
- Available for in-store use with PayPal app and virtual card added to Apple/Google Wallet
Cons
- Availability varies by country; Pay Later offers and names differ by region, like Pay in 3 in the UK
- Purchases must be approved by PayPal
- Pay Monthly missed payments may affect credit
Who it’s for
- Stores with customers who use PayPal often
6. Klarna
Klarna is one of the most well-known BNPL companies. It was founded in 2005 by students from the Stockholm School of Economics and is now available in more countries than its competitors. In March 2025, Klarna became Walmart’s official BNPL partner in the US, replacing Affirm.
The facts
- Interest: None for the Pay Later in 30 Days and Pay in 4 plans; 0% to 35.99% for monthly financing
- Loan term: 30 days, six weeks, and up to 24 months (monthly financing)
- Fees: Late fee may apply to Pay in 4 plans, up to $7 depending on terms and state. No late fees currently apply for Pay in 30 Days
- Credit line: Spending power varies; Klarna makes an automated approval decision each time
Pros
- Available both online and in-store
- Multiple repayment structures offer a wider range of options, allowing customers to finance medium and large purchases
- Available in Asia, Australia, Europe, and North America
- Performs a soft credit check on users for Pay Later in 30 Days and Pay in 4 plans
- Users can generate a single-use virtual card, which can be used in any online store
- Promotes partners through app, social media, and newsletters
Cons
- Each purchase must be approved by Klarna
- Some fees for late payments
Who it’s for
Brands that want international reach and app-based discovery
7. Zip
Zip is an Australian BNPL company launched in 2013 with a simple concept: Make a purchase today and split the payment into four equal, interest-free installments over six weeks.
The facts
- Interest: None, fees may apply depending on plan
- Loan term: Six weeks
- Fees: Origination/consumer fee (varies by purchase) and may charge late fees up to $7
- Credit line: Varies by user
Pros
- Available both online and in-store
- In-store via the Zip app plus Apple/Google Pay at many retailers that accept those wallets
- Notifications help users stay on track with installment payments
- Subject to credit approval
Cons
- Extra fees
- No monthly financing product in the US
- Each purchase must be approved by Zip
Who it’s for
- Businesses targeting budget-conscious consumers
8. Splitit
Splitit was founded in 2012 and is a unique competitor in the BNPL service space. Splitit works through users’ existing credit cards, then places an authorization for the full amount and charges installments over time. Consumers can split payments without receiving a loan or credit line, because the card itself is the guarantee.
In 2025, Splitit teamed up with Samsung Wallet to become its powering partner for installment payments across 21 US states and DC.
The facts
- Interest: None, but card interest can apply if balance is carried
- Loan term: Varies
- Fees: None
- Credit line: Uses customers’ existing credit card limits
Pros
- Available both online and in-store
- No applications, registration, or credit checks required
- Uses customers’ existing credit cards, allowing them to earn rewards on purchases
- Users can make larger purchases without worrying about interest
- Partnerships with Visa, Mastercard, and Stripe
- Businesses are able to set their own qualifying purchase amounts and select between two different business plans
Cons
- Users must have a credit card with sufficient credit to cover the cost of purchases
- Amex and Discover may not be supported, depending on the retailer
Who it’s for
Businesses that want to simplify the BNPL experience for customers
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BNPL companies FAQ
What are the biggest buy now, pay later apps?
With millions of users, Klarna and Afterpay are the two biggest BNPL companies. Both companies work with tens of thousands of retailers and are responsible for millions of transactions.
Does BNPL help your credit score?
BNPL does not help increase your credit score. With short-term repayment schedules, you typically won’t build up enough credit history for BNPL companies to report it to credit bureaus. While you may incur late fees for late payments, your credit won’t usually be negatively affected—but you won’t build credit either. Some companies, however, do offer payment plan options that can help users build their credit scores.
Do BNPL companies check your credit history?
Most buy now, pay later plans require a soft credit check that will not impact your credit score. Some BNPL services do not require a credit check at all for small purchases (but may do so for a large purchase). However, missed payments on BNPL loans can be reported to credit bureaus, which may affect your credit and eligibility for this payment method in the future.
How popular is buy now, pay later?
In the past few years, apps like Affirm, Klarna, and Shop Pay Installments have been gaining wide recognition, and big, established finance companies like PayPal are hopping on board. BNPL platforms and installment payment plans are becoming popular with consumers for their benefits over credit cards that charge interest.
