bnpl app cover

The world is changing rapidly, and technology is growing at an ever-increasing pace. It has made its very own space in every domain of our lives. From our homes to workspaces, technology has dominated all spheres. It is swift, advanced, compact, intuitive, and efficient. 

One such technology that has transformed for the better over the years is financial technology. Fintech has shaped our present and is surely giving the much-needed edge to the future as well. As per research, the global financial technology market is expected to grow at a CAGR of 23.58% from 2021 to 2025.

Have you ever heard of the Buy Now Pay Later apps? Well, surely they are the brainchild of the financial and technological innovations taking place these days. They are new, and they are trending. However, when it comes to building a buy now, pay later app, the task is not child’s play.  

But don’t worry, as we have got you covered. 

What is Buy Now, Pay Later Apps?

Buy Now Pay Later, as the name suggests, is a service, a payment plan, that allows people to buy products by giving them the option of making the payment later on at zero percent interest rates.

How do Buy Now, Pay Later apps work?

How do Buy Now, Pay Later apps work?
  • On such apps, customers can add to the cart whatever products they wish to buy. 
  • While on the checkout window, instead of choosing the option to make the payment, they can choose the buy now pay later option. 
  • If the customer is found to be eligible, the app will allow them to proceed further and show them various payment options to select from.
  • Customers can either choose to make a one-time payment later before a specific date or can opt for a series of installments to pay the amount later. 
  • The apps allow customers to use credit, and debit cards, UPI options, and even bank transfers to make payments on a future date.

Basic features of a buy now, pay later app

i. Credit Terms- Soft loan options are provided by several buy now, pay later apps that can be repaid in a few weeks or months. Certain high-value products might have a repayment period of more than two years.

ii. Convenience- On buy now, pay later apps, applying for loans, and gaining approval is a swift process and can be initiated while the customer is at the point of sale about to check out online. 

iii. Paperless process- The loan application and approval process is completely paperless and does not require the customers to sign any documents.

iv. Purchasing Power- Several buy now, pay later providers have set different limits on the loans they offer to the customers. Some may loans go up to $20,000. 

Benefits of building a buy now pay later app

Benefits of building a buy now pay later app

The BNPL payment method has become a growing trend among online shoppers, especially since the pandemic hit the world in 2020. Establishing a buy now pay later app has proven to be beneficial for various companies across the world. 

If you are someone who is thinking of building one too, then you can reap the following benefits-

Escalating sales 

At times, customers wish to make a purchase mentally and emotionally, but financial limitations tend to stop them from going ahead. Building a buy now pay later app makes it more convenient for customers to shop and simultaneously helps in generating more sales for your business. 

Staying active and stepping up your game

Look around you as a large number of buy now, pay later companies have already taken over the digital financial space, such as AfterPay, Klarna, Affirm, PayPal Credit, and many more. Did you know in 2025, buy now, pay later payments will increase to a value of $680 billion in transaction value globally? Yes, you read that right!

Hence, building an app like this is a sure-shot way of stepping up the ladder in this fast-paced tech world and staying ahead in the game like your competitors.

Developing trust

Building a BNPL app will help you in developing the trust between your business and customers as they are being given an affordable financial solution to make purchases, which would ultimately lead to a better customer experience. Once that trust is established, the customers will keep on visiting you more. 

Bringing down cart abandonment 

Many times it has been observed that customers, after searching for different products, have abandoned their carts due to the lack of payment options. One of the top reasons behind this is the extra cost levied on their purchases, such as shipping fees. 

Providing them with an app wherein, they get the choice of paying later will not only enable customers to extend their payments over a chosen period but also keep them engaged with the company for a longer time. This would ultimately result in building brand loyalty and customer retention rates.

Scaling conversion rates

Customers tend to shop more or make more purchases if they are provided with the buy now, pay later option in payments. As per industry data, businesses can increase their conversion rate by 20 percent to 30 percent with a buy now, pay later service. 

High average transaction costs

When customers are given the option of buying now and paying later, they tend to make more purchases and spend more money than they would otherwise. 

Enlarged client base

With a buy now, pay later app; clientele can be increased as it can attract customers who would not visit the app otherwise. Apart from this, customers make repeat purchases from buy now pay later apps. 

Now that you are well acquainted with the benefits of building a BNPL app, it is equally necessary to make yourself aware of the challenges that businesses face while establishing an app like this.

Challenges faced while building a buy now, pay later app

challenges of bnpl

Not having enough financial resources can be risky!

Developing a buy now pay later app means advancing money for customers’ payments. It means that as a business, you should have enough access to a good amount of financial resources and possess the appropriate licenses as per the demands of the country’s regulators. 

Payment failures happen time and again

There are all kinds of customers in the world. Payment failures are a routine happening in this business. Sending out emails and messages after the first default might not prove to be a great strategy.

Hence, while building the app, equal attention needs to be given to implementing automation and payment orchestration to handle scheduled customer payment fails and other such incidences in a better and more fruitful way. 

Well, now that you are fully aware of the pros and cons of building a buy now, pay later app, let’s jump into how are buy now, pay later apps made.

Steps to building a buy now pay later app

Steps to building a buy now pay later app

Brainstorm ideas

Before building a buy now pay later app, you should brainstorm ideas. It will help you in coming up with an original and novel concept. You can even ask yourself the following questions to drive your creative minds-

  1. What unique features will make your app more interesting than your competitors?
  2. What value can your app offer to customers?
  3. What is the main idea on which your app is built or based?

Analyze your target audience 

One of the most important steps in building a buy now, pay later app is to analyze your target audience. Paying special attention to your users’ needs makes the development process smoother and helps in curating a great end product. 

Apart from this, you need to focus on the behavioral trends of the users as well. Such as what features they would like to have in the app so that their experience becomes more convenient, what makes the users not want to download the app, or not visit the app much. 

In addition to this, you need to dig deeper and do in-depth research on the average age of users, where they live, their financial situations and limitations, hobbies, etc. 

Formulate a strategy 

Now that you have done your research, it is time to move on to the next step, which is to curate a strategy for your app. Your strategy should be based on the wants and needs of your target audience, expectations of users, which features to include in the app, etc.

Get the right web developer on onboard 

To make an efficient app, it is equally important to get a professional web development company on board that knows how to curate a buy now, pay later app with all the right features. 

Development and software testing 

Developing a buy now, pay later app is a time-consuming task as it can take years of persistent development. 

Following this, software testing is an equally crucial part of the whole development process. Special attention needs to be paid to slow or poor performance as it can lead to fewer users. Software testing would help in analyzing and tracing issues; hence it needs to be done before the launch of the final product.  

Time for marketing and promotion 

Marketing and promotion- the two key points to make people aware of your app. Promotion can be done in a variety of ways, such as through advertising on social media platforms like Instagram and Facebook. Other than that, you can also make use of email marketing, blogging, search engine optimization (SEO) techniques, paid advertising, etc. 

Shake hands with maintenance and support 

Once the app has been launched, the improvement journey does not end here. Keep on implementing the valuable feedback you get from the customers and improving the app from time to time. 

Top buy now, pay later apps in the market today 

top bnpl apps

Several prominent players have taken over the buy now, pay later app market globally. These are-

  • AFTERPAY- Afterpay Limited is an Australian financial technology company that was founded in October 2014 by Nick Molnar and Anthony Eisen. It is one of the most huge firms in the buy now pay later field. 
  • The company charges no interest from clients but levies an $8 to $25 late fee if the required payment is not made for ten days. 
  • PAYPAL HOLDINGS, INC- Paypal Holdings, Inc is an American multinational financial technology company that runs an online payments system in several countries. Its revenue for the quarter ending December 31, 2022, was $7.383 billion, a 6.72% increase year-over-year.
  • As one of the most prominent players in the buy now pay later app market, PayPal Holdings have millions of banks and merchants working with the company’s products and does not charge interest or late commissions from clients. 
  • KLARNA, INC- Klarna Bank AB is a Swedish fintech company that provides online financial services. It was founded in 2005. The company generates between $100-$500 million in annual revenue.  
  • The company is one of the many pioneers in the buy now pay later field and charges no extra fees from clients if all the scheduled payments are made on time. Although, the company charges a late payment fee of over $7 for missed payments.  
  • AFFIRM, INC- Affirm, Inc is a San Francisco-based publicly traded financial technology company that was founded in 2012 by Max Levchin, Nathan Gettings, Jeffrey Kaditz, and Alex Rampbell. The company generates an annual revenue between $100 to $500 million. It is one of the most popular BNPL apps.
  • It offers solutions that include BNPL and interest-free installment payments for retailers. Its estimated annual revenue is between $500 million to $1 billion. The company has 12,000 retailers, allowing clients to repay the loan within three, six, or twelve months without charging any extra fees.

How much money goes behind developing a buy now, pay later app?

The cost required to build a buy now, pay later app depends upon the following aspects-

  1. Product design
  2. Product Features
  3. Project size and complexity 
  4. The number of members working on the project 
  5. Time frame
  6. Hourly rate of the development team 

Conclusion

The buy now, pay later payment method is the new concept on the block and has been trending, especially during 2020 when the pandemic struck the world. Buy now, pay later apps have proven to be convenient for users who wish to make purchases but are bound by their financial limitations. Developing a build now, pay later app comes with its own set of benefits and challenges.

Developing a build now, pay later app is a time-consuming task, and attention needs to be given to each area, such as brainstorming ideas and getting the right professional web development company onboard. 

Contact us if you are interested in making a buy now, pay later app with experts with over ten years of experience. Our efficient team at Idea Usher will help you in curating the perfect app by implementing all the advanced and latest technologies so that your target audience can get the required efficient services.

Feel free to schedule a free consultation call to discuss your innovative project with our team.

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FAQ

Q. What is a buy now, pay later app?

ANS: Buy Now Pay Later, as the name suggests, is a service, a payment plan, that allows people to buy products by giving them the option of making the payment later on zero percent interest rates.

Q. What are some of the main features of a buy now, pay later app?

ANS: Buy now, pay later apps to offer soft loan options that can be repaid in a few weeks or months. Such apps are convenient as the loan approval process is swift and paperless. 

Q. What is the importance of researching the target audience while building a buy now, pay later app?

ANS: One of the most important steps in building a buy now, pay later app is to analyze your target audience. Paying special attention to your users’ needs makes the development process smoother and helps in curating a great end product. 

Q. How much money goes behind building a buy now, pay later app?

ANS: The cost required to develop a buy now pay later app is determined by various aspects such as product design, product features, the hourly rate charged by the development team, etc. 

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