Buy now, pay later (BNPL) programs have become immensely popular over the past few years. By the end of 2021, about 56% of consumers had used a BNPL program. These payment plans are attractive because of their low-to-no-interest format that doesn’t currently report to credit bureaus like a regular loan, giving them almost no credit impact. 

The most popular form of BNPL is the pay in 4 model, where customers can pay in 4 installments with no interest or credit impact. This allows for the actual cost of the purchase to be cleanly cut into four equal payments, with no extra cost lost to interest. The terms are incredibly simple and make it easy to understand and accept for consumers.

To get into greater detail on pay in 4 installments and why it is so successful, we will cover a few things, including:

• How pay in 4 works with merchants
• What it means for customers
• How merchants can get involved

How Pay in 4 Works With Merchants

While it may seem to consumers like the merchants themselves are offering the ability to break a purchase up into payments, there is usually a lender that is dispersing the funds, drafting the terms, and finalizing the agreement. This is because merchants typically need to be paid out in full when the purchase is made, so lenders pay the merchant upfront and allow the consumer to pay them back over time.

The companies that offer these services have some pretty recognizable names, like:

• PayPal
• Affirm
• AfterPay
• Klarna
• Skeps

These firms offer software that integrates with merchants’ websites so that the financing offer shows up seamlessly at checkout, making it easier for consumers to review and accept terms. As a result, merchants that offer POS financing see a 20-30% increase in conversion and a 30-50% increase in average ticket size.

What it Means for Customers

Pay in 4 installments offers customers a chance to increase their buying power when they want to make a big purchase. This can help during the holiday season when people are buying gifts for family, when replacing large appliances, or even just buying something nice for themselves like a TV or other fun tech products.

Before BNPL, the financing options they had access to were generally limited to:

• Store credit cards
• Consumer loans
• Leases

The issue with all of these options is that they bring along higher interest, heavy credit impact, and/or longer terms that make getting financing not worth the hassle. By eliminating these obstacles, merchants can give their consumers a generally frictionless path to increasing their buying power, which benefits the merchant by allowing consumers to purchase more.

How Merchants Can Get Involved

As stated in the first section, merchants can offer financing by partnering with a lender or fintech company. To get involved, all they have to do is reach out to a platform provider and then check out a demo of how the interface will operate on their website or app. These integrations work pretty seamlessly and typically allow the financing application to be embedded on the checkout page of a merchant’s site.

The process is pretty simple. Just reach out to a fintech, request a demo, and agree to terms. From there, deployment is only days or weeks away.

Let Customers Pay in 4 Installments With Skeps

There is no more comprehensive platform for eCommerce financing than Skeps’ POS financing platform. This integration allows consumers access to a full library of financing options, including:

• Buy now, pay later (BNPL)
• Store credit cards
• Consumer loans
• Leases

We also offer a variety of helpful features. One of those is omnichannel integration, meaning our platform can integrate with any website, app, or billing system. We also offer one-click financing applications to ensure a frictionless application experience, and unmatched speed of approval to keep customers from getting stuck waiting for a response. We work with a network of quality lenders, which assures consumers that they will always be presented with the best offer possible.