Buy Now, Pay Later at Checkout: Is It Worth Offering?

You’ve probably seen it at an online checkout: pay in four, pay in 30 days, pay later. But how does it actually work, and how can a customer walk out of your store with something they haven’t fully paid for yet? It’s a fair question, and the answer is simpler than you might think. It’s a payment method that’s become increasingly popular online and is now expanding into in-person shopping. With holiday shopping on the horizon, is this something your business should offer?

In this blog, we’ll break it down and explain how it works, the pros and cons, and how to decide whether it’s right for your business.

What is buy now pay later?

Essentially, BNPL is a short-term loan for your customer, just without the interest. You get paid for the sale upfront by the provider, and your customer pays the provider back bit by bit. Usually, they pay nothing at the register, or just the first installment, and pay off the rest over the next few weeks or months. The most common options are:

• Pay in four: the cost is split into equal payments, usually every two weeks.
• Pay in 30 days: the customer pays the full amount a month later.

So what happens if your customer misses a payment? Usually, the provider will charge them a late fee, while customers who pay on time won’t pay a cent extra. Either way, it won’t affect you, since you’ve already been paid, but it’s worth knowing in case a customer asks.

Although this might sound a little bit out of the ordinary, paying in installments isn’t actually new. People have spread the cost of big purchases for generations, from layaway to catalog orders. BNPL is the modern, app-based version. Klarna, founded in Sweden in 2005, led the way, and the pandemic sent online shopping, and BNPL along with it, soaring. Today, it’s available for everything from furniture and appliances to everyday items like clothing and footwear.

These days, customers like to have options, and BNPL is just one of them. If you’d like to see how it fits alongside cards, mobile wallets and the rest, take a look at our guide to retail payment processing.

How does BNPL work in-store?

So how do you set up BNPL to work in-store? Paying with BNPL in a store works a little differently from online, but don’t worry, it’s still quick and simple for both you and your customers. In most cases, it looks just like a regular contactless payment. There are two main ways they can do it:

• Tapping their phone: some providers give customers a virtual card that lives in their digital wallet, so they just tap their phone on your card reader like any other contactless payment.
• Scanning a code: with other providers, the customer opens the app and either scans a QR code at your register or shows a barcode for your staff to scan.

For most small businesses, the tap-to-pay option is the easiest. It works with the card reader you already have, so there’s nothing new to set up at the register.

Either way, your customers will need an account with the BNPL provider, which they usually set up through its app. Whether you need one too depends on the provider. Some virtual cards work anywhere that takes contactless, so your customers may already be using BNPL at your register without you knowing. Others only work at stores that have signed up with them, and the same goes for any QR code or barcode setup.

Even if you don’t strictly need an account, signing up with a provider is what lets you advertise BNPL in your store and appear in its store directory, so it’s worth doing if you want to promote it. And because the tap-to-pay option works with the card reader you already have, there’s no new hardware to buy.

The benefits of offering BNPL in-store

So why would you offer BNPL in the first place? For the right business, it can work as a really great payment option. Here are some of the biggest benefits:

Bigger sales: when customers can spread the cost, they’re often happy to spend a bit more. That might mean going for the higher-end model, or adding a few extra items to their cart while they’re at it. Pair it with smart upselling and cross-selling, and you could see your average sale grow even more.

Fewer lost sales: we’ve all seen it happen. A customer loves something, but the price feels like too much to pay all at once, so they put it back. Giving them the option to split the cost can turn that maybe into a yes.

You get paid upfront: the provider pays you the full amount, minus its fee, and takes on the risk if the customer doesn’t pay. That means no chasing payments and no waiting around for your money.

New customers through the door: BNPL is especially popular with younger shoppers, and many use provider apps to find stores that accept it. Being listed there can bring in people who might never have found you otherwise.

The downsides to consider

Of course, BNPL isn’t all good news. Before you sign up, it’s worth considering the drawbacks:

Higher fees: BNPL usually costs more to accept than a standard card payment, because the provider is the one taking on the risk. Fees vary between providers and plans, so it’s worth comparing providers carefully and checking the numbers against your margins first.

Refunds take a little more work: returns still follow your usual policy, but your staff will need to process them through the provider. That way, the customer’s remaining payments are updated, and they’re not left paying for something they’ve returned.

Looking after your customers: BNPL makes it very easy to spend, and some people end up taking on more than they can comfortably pay back. If your team pushes it too hard, it can leave customers feeling pressured and damage the trust you’ve built with them, so it’s best offered as a helpful option rather than a sales tactic.

BNPL and the rules in the US

For a long time, BNPL sat in a bit of a gray area, and unlike credit cards, it isn’t covered by one clear set of federal rules. In 2024, the Consumer Financial Protection Bureau (CFPB) issued a rule treating some BNPL loans like credit cards, but it withdrew that rule in 2025.

Since then, states have started to step in. New York has led the way, passing a law in 2025 that requires BNPL providers to be licensed by the state, and its rules are still being finalized.

So what does that mean for you? Luckily, very little changes day to day, since the rules apply to the BNPL provider rather than the store selling the goods. If you’re thinking about using a smaller or newer provider, though, it’s worth checking that it’s licensed to lend in your state, and keeping an eye on any new rules where you do business.

Is BNPL right for your business?

Just because other businesses might be offering BNPL does not mean you should automatically jump on the trend. Make sure to really think about BNPL in terms of your products, customers, and business model. Generally, it works best when you sell higher-value items, or when customers tend to buy several things at once, and the total price plays a big part in whether they go ahead. That often includes:

• Fashion and footwear retailers
• Beauty salons, spas and barbershops offering treatment packages
• Electronics and gadget stores
• Furniture and home goods stores
• Bike shops and sporting goods retailers
• Jewelers and gift shops

If, say, most of your sales are small, everyday purchases, like a coffee or a newspaper, BNPL is unlikely to make much difference, and the fees probably won’t be worth it.

So, are you still not sure? Asking yourself a few simple questions can help you work out whether BNPL is likely to pay off:

1. What’s your average transaction value? The more customers usually spend at once, the more difference BNPL is likely to make.
2. Do customers ever hesitate at the register? If you’ve seen people put things back because of the price, BNPL could help close those sales.
3. Can your margins handle a higher fee? It’s only worth it if the extra sales make up for what you’ll pay the provider.
4. Are your competitors already offering it? If shoppers can split the cost down the street, they may choose to shop there instead.

The good news is that you probably have most of the answers already, sitting in your sales data. Our blog on the 8 most useful reports you can run in Epos Now shows you how to find your average transaction value and best-selling products, so you can make the decision based on real numbers rather than guesswork.

How to start offering BNPL in-store

If you think BNPL could work for your business, setting it up doesn’t take long. Most of it comes down to choosing a provider and making sure your team and customers know it’s there. Here’s where to start:

1. Compare a few providers: fees vary, so don’t just sign up with the first one you’ve heard of. Check how much each charges, how quickly you’ll be paid, how refunds work, and whether they support in-store payments.
2. Check your card reader: if your provider uses a virtual card, customers will pay by tapping their phone, so your card reader needs to accept contactless and mobile payments like Apple Pay and Google Pay. All Epos Now card readers, including the portable Air, already do, so if you have one, there’s nothing to change.
3. Talk your team through it: customers will ask your staff how it works, so they should know the basics, including how to process a refund. Remind them to mention it as an option, not push it.
4. Tell your customers: put a sign at the register and in the window, and add it to your website and social media. Plenty of shoppers check before they visit.
5. Check how it’s going: after a few months, look at your average transaction value and sales. If they’ve gone up enough to cover the fees, it’s working. If not, it might be time to rethink.

If you also sell online, offer BNPL there too, so customers have the same options wherever they buy from you. Our guide to accepting credit card payments covers how to take payments online as well as in-store, and with Pay by Link, you can even send customers a secure link to pay remotely.

The verdict: should you offer BNPL at your register?

Of course, BNPL isn’t some magic fix, and it won’t suit everyone. But for the right business, it’s a simple way to stop price from getting in the way of a sale. Customers get the thing they wanted today, you get paid upfront, and it’s business as usual, without any extra fuss on your end. Just make sure the extra sales are worth the fees before you commit.

Whatever you decide, your customers will expect to pay quickly and in the way that suits them. With an Epos Now POS system and integrated Epos Now Payments, you can take card, contactless and mobile wallet payments, including Apple Pay and Google Pay. That means customers who’ve added a BNPL card to their phone can tap and pay in installments at your register, just like any other contactless payment. And because every sale is tracked in real time, you can see exactly what’s working for your business.