How To Develop A BNPL App Like Splitit?

As traditional credit cards come with high interest rates and complicated reward structures, the need for a transparent and accessible financing solution is evident. Buy Now, Pay Later applications like Splitit addresses this gap by providing instant credit decisions, flexible repayment plans, and a user-friendly interface. 

But how can you utilize the growing BNPL trend? This blog explores the essential steps and considerations to build a successful BNPL app that competes with industry leaders like Splitit.

We’ll cover the technical aspects, core features, and strategic partnerships required to establish a strong market presence. Additionally, we’ll discuss AI-powered underwriting, effective risk management strategies, and seamless integrations with e-commerce platforms. By understanding these key components, your business can capitalize on the BNPL trend and deliver a superior, user-friendly financial solution.

What Is A Splitit App?

The Splitit app is a Buy Now, Pay Later (BNPL) service that provides a flexible way for consumers to manage their purchases. It allows users to split their payments into interest-free monthly installments using their existing credit cards while eliminating the need for additional registrations or credit checks. Splitit’s key features include the use of existing credit cards, interest-free payments, no hidden fees, global availability, and seamless integration with major e-commerce platforms like Shopify, Magento, and WooCommerce.

Using Splitit makes high-value purchases more affordable by breaking down costs into manageable installments. Its transparent pricing, with no hidden fees, helps build trust with users. The app’s user-friendly experience and global reach make it an appealing option for both consumers and retailers. It enhances the overall shopping experience by providing flexible, secure, and transparent payment solutions.

Market Statistics Of Buy Now Pay Later Services

• The Buy Now Pay Later (BNPL) market is on a trajectory to reach USD 37.19 billion by 2024, driven by the growing consumer demand for flexible payment solutions and the increasing presence of BNPL options in various retail sectors.
• Projections estimate the total BNPL market value to soar to nearly USD 500 billion by the end of 2024. This remarkable growth underscores the widespread acceptance and utilization of BNPL services by both consumers and merchants.
• Globally, the number of BNPL users is expected to surpass 380 million, marking a 107% increase. This surge in adoption highlights the preference for BNPL services over traditional credit options among a diverse user base.
• A considerable share of BNPL users is within the 18 to 34-year-old demographic, indicating the significant appeal of BNPL solutions to younger consumers who value financial flexibility and convenience.
• Currently, the global BNPL user base stands at approximately 360 million, showcasing the extensive reach and popularity of these services worldwide.
• In the United States, nearly half of the population has shown interest in BNPL services, suggesting a substantial potential for market growth in North America.

How Does The Splitit App Work For Users?

The Splitit app makes it easy to manage purchases by allowing you to pay in interest-free monthly installments. Here’s a step-by-step guide on how it works:

1. Shopping And Checkout Process

When shopping online at a store that accepts Splitit, customers add items to their cart as usual. During checkout, they select Splitit as their payment method, which allows them to spread out their payments over time.

2. Choosing Installments

Customers can choose the number of monthly installments that suit their budget. The available installment options depend on the store and the total purchase amount.

3. Using An Existing Credit Card

Shoppers enter their existing Visa or Mastercard credit card details. Splitit authorizes the total purchase amount on the card but only charges the first installment immediately. This authorization ensures there is enough credit available for the full amount.

4. Automatic Monthly Payments

After the initial payment, Splitit automatically charges the remaining installments to the customer’s card each month. This automated process ensures timely payments without requiring additional effort.

5. Tracking Payments

Customers can track their payment schedule and remaining balance through the Splitit app or website. This transparency aids in better financial management.

How Does The Splitit App Work On The Backend?

The Splitit app relies on an advanced backend architecture to deliver a seamless experience for managing and splitting expenses. 

• The backend uses Node.js coupled with the Express framework. This combination handles the server-side logic, managing HTTP requests, routing, and middleware integration efficiently.
• For data management, Splitit employs database systems like MongoDB, PostgreSQL, or MySQL, which are well-suited for storing user profiles, bills, expenses, and balances. These databases ensure secure, reliable, and easily accessible data storage.
• User authentication is an important component that utilizes secure hashing algorithms and possibly OAuth to handle registration, login, and session management. This ensures that user credentials and financial data remain protected from unauthorized access.
• Bill management features allow users to add, edit, and delete detailed bill entries. The backend processes these entries with rigorous data validation to maintain accuracy and integrity.
• The app’s advanced expense-splitting algorithm accurately calculates each member’s share based on the total expenses and the members involved. This algorithm supports various splitting methods and ensures fairness and precision.
• Balance settlement functionality enables users to track and settle debts within the group. The backend updates balances in real-time, provides clear summaries of outstanding amounts, and simplifies the settlement process.
• Splitit ensures secure data transmission using HTTPS protocols and incorporates features for error handling, logging, and monitoring. These elements maintain the app’s reliability, security, and performance, providing users with a seamless and secure expense management experience.

What Makes Splitit Unique And Popular?

Splitit has established itself as a standout in the Buy Now Pay Later (BNPL) industry by offering features that address modern shoppers’ needs. Here’s a concise look at what sets Splitit apart:

1. Zero Interest And Fees

Splitit’s commitment to no interest and no late fees is a major draw. Unlike other BNPL services that add hidden charges and interest rates, Splitit provides a transparent and cost-effective solution. Users only pay for their purchases, free from additional financial burdens.

2. Use Of Existing Credit And Debit Cards

A unique aspect of Splitit is its use of existing Visa or Mastercard credit or debit cards. This eliminates the need for new credit applications or credit checks while simplifying the payment process and making it more accessible and user-friendly.

3. Flexible Installment Plans

Splitit offers flexible payment terms and allows users to choose the number of installments that fit their budget, ranging from three to 24 months. This control over repayment schedules provides stress-free budgeting and financial planning.

4. Simplified Application Process

The streamlined application process is another user-centric feature. There are no lengthy forms or complicated steps. Once a user’s card is accepted, the transaction proceeds smoothly, ensuring a quick and efficient checkout experience.

5. Shopper-Centric Convenience

By keeping payments manageable, Splitit enables users to purchase high-value items without worrying about high interest rates or hidden fees. This shopper-focused approach makes luxury items accessible while promoting financial inclusivity.

6. Strategic Retail Partnerships

Splitit’s partnerships with well-known retailers like James Avery and SofaClub allow users to select payment plans that suit their lifestyle and financial goals. These collaborations enhance Splitit’s appeal and versatility.

Why Bnpl Apps like Splitit are growing in the industry?

Investing in a Buy Now Pay Later apps is becoming increasingly popular in the industry due to several compelling reasons:

1. Expanding Customer Reach

A BNPL app attracts a broader audience by offering flexibility and convenience when making purchasing decisions. This approach not only increases customer acquisition but also strengthens market presence.

2. Increasing Average Order Value (AOV)

By allowing customers to split payments over time, a BNPL platform such as Splitit encourages larger purchases and boosts sales figures. This flexibility reduces financial barriers and encourages more frequent transactions.

3. Building Customer Loyalty

BNPL services promote customer loyalty by offering younger users a responsible way to build credit. It also simplifies payment management for established customers and enhances long-term satisfaction and retention.

4. Enhancing Brand Satisfaction

Splitit’s user-friendly interface improves the shopping experience by streamlining payments and reducing checkout hassle. This efficiency boosts brand loyalty and generates positive referrals.

5. Gaining a Competitive Edge

Offering BNPL options sets businesses apart in a competitive market. It meets the growing demand for flexible payment solutions and positions the business as customer-focused and innovative.

6. Forming Strategic Retail Partnerships

Collaborating with retailers through BNPL frameworks expands market reach and customer engagement. Partnering with brands like James Avery and SofaClub allows businesses to offer customized payment plans that attract a wider customer base.

Advanced Features To Consider In Your BNPL App

To make a BNPL app like Splitit more competitive, consider adding these advanced features:

1. AI-Powered Risk Assessment

You can use AI to check users’ financial habits and creditworthiness. AI can analyze spending patterns, purchase history, and credit scores. This helps in setting credit limits and payment terms that fit each user and reduces the risk of missed payments.

2. Blockchain-Based Transaction Records

You can use blockchain to record all transactions securely and transparently. It helps create a decentralized and unchangeable ledger. This technology ensures that transaction data cannot be altered, which increases security and trust.

3. Cryptocurrency Support

You can allow your users to pay with cryptocurrencies like Bitcoin and Ethereum. With the growing use of digital currencies, offering this option can attract users who prefer using digital currencies. This feature provides more payment choices and can make your app more appealing to a tech-savvy audience.

4. Dynamic Payment Plans

Create AI-driven payment plans based on individual user profiles. By considering their purchase history and credit score, the app can make it easier for users to manage their budgets and increase the likelihood of on-time payments.

5. Integration With Multiple E-Commerce Platforms

Ensure the app works smoothly with various online shopping platforms. This compatibility allows more online retailers to offer your BNPL service. It can help expand your reach and user base, increase transaction volumes, and provide users with more shopping options.

6. Global Operations Support:

Design the app to handle multiple languages and currencies and comply with financial rules in different countries. This allows you to expand your services globally while reaching more customers.

How To Develop A BNPL App Like Splitit: A Step-By-Step Guide

Here are all the steps you need to consider to develop a Buy Now Pay Later (BNPL) app like Splitit:

1. Conduct In-Depth Market Research

Start by understanding your target market. Analyze user demographics, spending habits, and preferences. Study competitors like Splitit to identify their strengths and weaknesses. Stay updated on trends in BNPL services and fintech to ensure your app addresses current market needs.

2. Define Your Project Scope

Based on your market research, define the scope of your project. Identify your target audience and key features, and set a realistic timeline. Consider essential BNPL features such as flexible payment plans, interest-free periods, and integration with multiple e-commerce platforms. Plan for scalability, regulatory compliance, and future integrations with third-party services. Outline your business objectives and ensure they align with your app’s capabilities.

3. Assemble A Skilled Development Team

Form a team of developers with experience in fintech. You’ll need frontend and backend developers, UX/UI designers, and experts in security and compliance. A project manager should coordinate the team’s efforts to ensure timely delivery. Additionally, you can consider hiring AI/ML experts for advanced functionalities or outsourcing your project to an experienced fintech app development company.

4. Design An Intuitive UX/UI

Focus on creating a user-friendly interface. Conduct usability testing to identify and rectify pain points. At this phase, you must ensure the design includes features like installment calculators, payment reminders, and transaction history. Additionally, you can implement AI-driven personalization features to enhance user engagement. In the end, make sure that the design complies with accessibility standards to cater to a wider audience. You can also conduct usability testing to identify areas for improvement.

5. Implement Security Measures

Security is, as usual, the top priority for financial apps. To maintain this, you can integrate strong identity verification methods and multi-factor authentication. Ensure compliance with PCI-DSS standards to protect user data and secure payment processing. Along with this, fraud detection algorithms will be implemented to monitor suspicious activities.

6. Develop A Scalable Backend

Build a backend using microservices architecture for flexibility and scalability – capable of handling large volumes of transactions. Set up secure servers, databases, and APIs for efficient management of user accounts and payment processing.

7. Build Responsive Frontend Components

Develop responsive frontend components that provide a seamless user experience across devices. Integrate real-time updates on payment schedules, due dates, and transaction statuses. Include features like push notifications to keep users informed about their transactions and payment schedules. Additionally, ensure the design so that all other features of your app can work flawlessly and users can navigate through your BNPL app conveniently. 

8. Integrate Third-Party APIs

Integrate your app with major payment gateways and banking APIs for smooth fund transfers. Use third-party services for fraud prevention, credit checks, analytics, and customer support. Secure your API endpoints and maintain thorough documentation for future enhancements.

9. Ensure Regulatory Compliance

BNPL services must comply with financial regulations and data protection laws. Work closely with legal advisors to ensure your app complies with global financial regulations and data protection laws like GDPR and CCPA. Regularly update your compliance measures to stay aligned with evolving regulations.

10. Testing, Deployment, And Maintenance

Perform extensive testing to ensure your app’s functionality and security. Conduct user acceptance testing (UAT) with a diverse group to gather feedback. Implement automated testing to maintain high-quality standards.

Deploy your app in phases to manage user feedback and adoption smoothly. Implement continuous deployment practices to ensure seamless updates and maintenance. Monitor app performance and address issues promptly to maintain user trust.

You can also use analytics tools to monitor app performance, user behavior, and transaction trends. Utilize those insights to optimize features and enhance user satisfaction. At the final stage, continuous improvement based on real-time data is important for long-term success.

Tech Stack Required To Develop A BNPL App Like Splitit

Aspect	Technology
Frontend Development	React Native or Flutter (for mobile), React.js or Angular (for web)
Backend Development	Python (Django or Flask), PostgreSQL or MongoDB
Integration and APIs	Payment gateways (e.g., Stripe, Braintree), Open Banking APIs
Cloud Services	AWS, Google Cloud Platform, or Microsoft Azure, Docker and Kubernetes
Monitoring and Analytics	Prometheus and Grafana (for monitoring), Google Analytics or Mixpanel (for analytics)
Security	AES encryption, OAuth 2.0, 2FA, biometric login, Compliance with PCI DSS, KYC/AML regulations

5 Popular BNPL Apps Like Splitit

Here are five popular Buy Now Pay Later (BNPL) apps:

1. Klarna

Klarna provides a flexible shopping experience, enabling users to delay payments and pay later. It uses an interest-free model with no late fees or compound interest, making it a responsible choice for those who want to enjoy their favorite purchases without immediate financial pressure. Klarna also offers exclusive discounts and deals.

2. Sezzle

Sezzle is a digital payment service that helps users manage their finances by allowing them to split purchases into four interest-free payments over three months. Using Sezzle does not affect your credit score. Additionally, it offers app-exclusive shopping benefits, providing access to deals from preferred brands.

3. Afterpay

Afterpay features a pay-in-four plan along with flexible monthly payment options. Users can utilize the Afterpay app to split payments for online and in-store purchases without any interest charges. The app also facilitates browsing and purchasing from various categories like fashion, beauty, and technology, along with offering discounts and gift cards.

4. Zip

Zip tops PYMNTS’ BNPL Provider Rankings. While it does charge installment fees for its Pay-in-4 loans, Zip’s popularity is due to its acceptance by over 80,000 merchants. The ‘Zip Anywhere’ feature enables users to shop at merchants that do not explicitly offer ‘Buy with Zip.’ Installment fees are $4 for purchases up to $99.99, $5 for purchases up to $199.99, and $6 for purchases of $200 or more.

5. Affirm

Affirm offers a variety of BNPL options, including pay-in-four and monthly installment plans. It emphasizes transparent credit practices to help users avoid unmanageable debt while spreading out payments for desired products. Affirm guarantees no hidden fees or added interest, preserving the advantages of using existing credit cards, such as rewards and fraud protection.

Cost Analysis: How Much Does It Cost To Build An App Like Splitit?

Here are detailed costs for building an app like Splitit, including a note that these figures are estimations.

Component	Cost Range (USD)
App Development
– Single Platform	$30,000 – $60,000
– Both Platforms	$50,000 – $100,000
UI/UX Design
– Research and Wireframing	$5,000 – $10,000
– Visual Design	$10,000 – $20,000
– Prototyping	$5,000 – $10,000
Backend Development
– Server Setup and Maintenance	$10,000 – $20,000
– Database Design and Integration	$10,000 – $20,000
– APIs and Third-Party Integrations	$10,000 – $30,000
Features and Functionalities
– User Authentication and Authorization	$5,000 – $10,000
– Payment Gateway Integration	$10,000 – $20,000
– User Profile Management	$5,000 – $10,000
– Transaction Management and History	$10,000 – $20,000
– Notification System	$5,000 – $10,000
– Customer Support Chat	$5,000 – $10,000
Security
– Data Encryption	$5,000 – $10,000
– Secure Payment Processing	$10,000 – $20,000
– Compliance with Regulations (e.g., PCI-DSS)	$10,000 – $20,000
Testing and Quality Assurance
– Manual Testing	$5,000 – $10,000
– Automated Testing	$10,000 – $20,000
– Bug Fixes and Iterations	$5,000 – $10,000
Deployment and Maintenance
– Initial Deployment	$5,000 – $10,000
– Ongoing Maintenance and Updates	$10,000 – $20,000 per year
Marketing and Promotion
– Initial Marketing Campaign	$10,000 – $20,000
– Ongoing Marketing and User Acquisition	$5,000 – $10,000 per month

Total Estimated Cost

• Minimum Cost: $140,000
• Maximum Cost: $350,000

Note

These costs are estimations and can vary based on several factors, including the complexity of features, development team location, and specific business requirements.

Cost-Affecting Factors To Consider

Developing a BNPL app like Splitit involves various factors that can significantly affect the overall cost. Here are some key points:

Complexity of Features

The complexity of features plays a crucial role in determining the cost. Basic features include user authentication, payment processing, transaction history, and notification systems. However, incorporating advanced functionalities like AI-based fraud detection, personalized offers, and sophisticated backend systems will significantly increase development time and expenses.

Third-Party Integrations

Integrating third-party services and APIs can add to the overall cost. Payment gateway integration, for example, is essential for a BNPL app but can be costly depending on the provider and the complexity of the integration.

Security and Compliance

Ensuring high levels of security and compliance with regulations such as PCI-DSS is critical for a BNPL app. Implementing robust data encryption, secure payment processing, and adhering to industry standards can increase development costs but is necessary to protect user data and build trust.

Customization and Scalability

Highly customized solutions and scalable infrastructure are often more expensive but necessary for accommodating future growth and specific business requirements. This includes designing a flexible architecture that can handle increased user demand and adding features tailored to specific market needs.

Testing and Quality Assurance

Comprehensive testing and quality assurance are essential to ensure the app’s reliability and performance. This includes manual and automated testing, bug fixes, and iterations, all of which contribute to the overall development cost.

Marketing and Promotion

Effective marketing and promotion strategies are crucial for attracting and retaining users. Initial marketing campaigns and ongoing user acquisition efforts require significant investment but are essential for the app’s success and growth.

Ongoing Maintenance

Regular updates and maintenance are necessary to keep the app running smoothly and securely. This includes fixing bugs, updating software components, and adding new features over time, all of which add to the long-term costs of maintaining the app.

Conclusion

Developing a BNPL app like Splitit offers significant opportunities in the expanding fintech market. Key elements of such an app include a user-friendly interface, security measures, and seamless integration with Open Banking APIs. Additionally, a clean design can enhance user engagement, while advanced encryption can ensure ultimate data protection. Moreover, if you implement real-time financial data access, you can allow users to access personalized credit solutions. If we talk about the development costs, they can vary – with basic apps starting at $15,000 and advanced ones exceeding $50,000. Moreover, while building a BNPL app like Splitit, ensuring compliance with data protection laws and financial regulations is important. By focusing on these factors, businesses like yours can develop a competitive and innovative BNPL app like Splitit and grow in the financial segment.

Build a BNPL App Like Splitit With Idea Usher

Develop your BNPL app with Idea Usher and achieve the success of platforms like Splitit. Our expertise lies in converting ideas into functional fintech solutions. We ensure a seamless user experience, utilizing advanced technologies such as ML and Open Banking for personalized services. 

Why wait when you can enhance your customer engagement and expand your market reach in the competitive fintech industry? Partner with Idea Usher to innovate and develop a leading BNPL platform. Let’s collaborate to bring your vision to reality and meet the evolving demands of modern financial services.

FAQ

How do I start a BNPL startup?

To start a BNPL startup, begin with thorough market research. Develop a solid business plan, secure funding, and assemble a skilled development team. Focus on creating a user-friendly app, establish partnerships with merchants, and ensure compliance with financial regulations. Launch a marketing strategy to attract users and merchants.

Is BNPL profitable?

Yes, BNPL can be profitable. Revenue streams include merchant fees, interest from installment plans, and late fees. Profitability depends on user adoption, transaction volume, and effective risk management. Success requires balancing user-friendly terms with sound financial practices to minimize defaults and maximize merchant partnerships.