Develop A BNPL App Like FlexShopper: Process, Cost & Features

Buy Now, Pay Later apps are changing the way consumers shop for the better. It allows them to make purchases immediately and pay for them over time. This modern alternative to traditional payment methods has quickly become popular, with more businesses adopting BNPL solutions to improve customer experience and boost sales. Apps like FlexShopper, SplitIt, Affirm, have successfully tapped into this growing trend, generating substantial revenue and proving the potential of BNPL services. As interest in BNPL app development rises among businesses, startups, and entrepreneurs, now is the perfect time to explore and develop a BNPL app like FlexShopper.

In this blog, we will look into the details of developing a BNPL app like FlexShopper. We will cover everything from exploring the market potential and key features to the step-by-step development process and cost considerations. Whether you are looking to expand your business offerings or tap into the fintech industry, this guide will equip you with the information needed to capitalize on the BNPL trend and create a successful app.

Key Market Trends For BNPL

The global Buy Now Pay Later market is projected to experience significant growth. According to Market.us, it will reach an estimated value of USD 115 billion by 2032, Which represents a substantial increase from its estimated worth of USD 16 billion in 2023.

Analysts forecast a Compound Annual Growth Rate of 25.3% during this timeframe. North America currently holds the leading position in the BNPL market, accounting for roughly 32% of global revenue in 2022.

This lead can be attributed to several factors, including the presence of established BNPL players and a focus on regional market expansion. 

Understanding BNPL Apps And Their Rising Demand 

A BNPL app provides a convenient and flexible payment option for consumers. It allows them to split their purchases into smaller, manageable installments, typically spread over a few weeks or months. Unlike traditional credit cards, BNPL services often come with several advantages:

No interest fees

Many BNPL providers waive interest charges if the balance is paid within a predetermined timeframe. This can be a major advantage for budget-conscious consumers who want to avoid accruing debt.

Faster approvals

The application process for BNPL services is often quicker and simpler than that for traditional credit cards. This streamlined approach makes BNPL attractive to younger generations and those with limited credit history.

Convenience

BNPL apps provide a seamless user experience. Everything is managed through the app, allowing for easy purchases and on-time payments. Users can track their spending and upcoming installments within the app itself.

Why is the Demand for BNPL Apps Rising?

The BNPL market is experiencing explosive growth, fueled by several key factors:

Increased consumer preference for flexible payments

Millennials and Gen Z, who make up a growing segment of the buying population, prioritize financial flexibility. BNPL caters to this preference by allowing them to manage the cash flow better, more effectively, and avoid large upfront costs.

Growing e-commerce market

The rise of online shopping creates a perfect fit for BNPL’s convenient payment integration. BNPL apps seamlessly integrate with e-commerce platforms, offering a frictionless checkout experience that can increase conversion rates and boost online sales.

Underserved credit market

BNPL can be an attractive alternative for those with limited credit history or who prefer not to use credit cards. This can be particularly relevant for younger consumers who have just started to create their credit or for those who are wary of revolving credit card debt.

Why Should You Consider Developing A BNPL App? 

Building a BNPL app can be a strategic investment for several reasons:

01 Market Opportunity

The BNPL market is on a rapid growth trajectory, presenting a significant opportunity to capture a share of this expanding market. By entering the market early, businesses can establish themselves as key players and benefit from the anticipated future growth.

02 Increased Sales

Studies have shown that offering BNPL as a payment option can incentivize purchases and boost sales for partnered merchants. BNPL allows customers to distribute out the cost of their purchases, potentially leading to them spending more or being more likely to complete a purchase they might otherwise hesitate on.

03 Customer Loyalty

BNPL can foster customer loyalty by providing a convenient and accessible payment method that aligns with how today’s consumers prefer to manage their finances. Offering a seamless and positive BNPL experience can encourage repeat business and create stronger customer relationships.

04 Data Insights

BNPL apps generate valuable customer spending data, providing businesses with rich insights into consumer behavior and spending habits. This data can be used for customized marketing campaigns, product development, and improved customer experiences.

05 Competitive Edge

Integrating BNPL positions your business at the forefront of the evolving payments landscape. By offering a cutting-edge payment solution, you can differentiate yourself from competitors and attract consumers who are looking for convenient and flexible payment options.

What Makes FlexShopper Unique?

FlexShopper is a BNPL (Buy Now, Pay Later) app with a focus on lease-to-own financing for furniture, electronics, appliances, and other household goods. Unlike some BNPL apps that focus on short-term installments, FlexShopper leans towards lease-to-own agreements. This means users make payments over a longer period (typically weekly or bi-weekly) to own the item outright at the end of the lease. Here’s a breakdown of FlexShopper and what sets it apart:

No Down Payment

Many BNPL providers require an upfront down payment, especially for larger purchases. FlexShopper reportedly allows users to take the item home immediately with no down payment required. This could be particularly appealing to budget-conscious consumers who may not have the funds for a down payment.

Focus on Broader Product Selection

While some BNPL services focus on specific categories like electronics or appliances, FlexShopper seems to offer a wider range of products, including furniture, home improvement items, and lifestyle goods, potentially catering to a broader customer base.

Multiple Shopping Avenues

FlexShopper offers multiple ways to shop using their BNPL service: through their own online store, partnering with third-party online retailers, and even through automated kiosks at select offline retail locations. This multi-channel approach provides greater flexibility and convenience for users.

Potential Risk-Reward in Approvals

FlexShopper has developed its own risk assessment algorithms, which might lead to approving users who might not qualify for traditional BNPL options. This could be beneficial for those with limited credit history but could also pose a risk for FlexShopper if the algorithms don’t accurately assess creditworthiness.

Key Features To Consider To  Develop A Buy Now Pay Later App Like FlexShopper 

Here are ten key features to consider when developing a BNPL app inspired by FlexShopper’s focus on lease-to-own for household goods:

01 Seamless User Interface (UI) and User Experience (UX)

The app should be intuitive and user-friendly across all demographics. A clean, modern UI with clear navigation is essential. Onboarding should be streamlined, allowing users to set up their accounts and understand the BNPL process quickly. Consider in-app tutorials or explainer videos to guide users through the features and benefits.

02 Lease-to-Own Options

Don’t just present lease terms – make them crystal clear. Highlight key details upfront, like total repayment amounts, including any fees or interest charges, alongside the advertised lease duration and payment schedule (weekly/bi-weekly options). An easy-to-understand comparison tool can be helpful, allowing users to see the cost difference between a traditional purchase and the lease-to-own option.

03 Curated Product Marketplace

Partner with a diverse range of reputable retailers to offer a curated selection of household goods (furniture, electronics, appliances) that cater to your target audience’s preferences. Go beyond simple product listings. 

Consider collaborating with retailers to offer exclusive deals or bundled packages within the app to incentivize purchases. Explore potential integrations with existing e-commerce platforms to further widen your product reach and provide a seamless user experience for online browsing and checkout.

04 Frictionless Payment Processing

Cater to both online shoppers and in-store customers. For online transactions, integrate a secure virtual credit card generation system that seamlessly integrates with partner retailers’ checkout processes. For in-store purchases, leverage the power of mobile technology. 

Enable users to initiate lease agreements instantly by scanning receipts with the app’s camera or using QR codes provided at checkout. This eliminates the need for lengthy paperwork and ensures a smooth transition from the physical store to the BNPL agreement.

05 Pre-Qualification & Spending Limit Tools 

Allow users to pre-qualify for a BNPL limit without impacting their credit score. Take it a step further by providing educational resources alongside the pre-qualification process. Explain factors that influence creditworthiness and offer tips for building a healthy credit score. This transparency fosters trust and empowers users to make informed financial decisions. The spending limit should be clearly communicated and easily accessible within the app.

06 Account Management

Provide a dedicated account section that goes beyond basic transaction tracking. Allow users to manage their BNPL agreements, view detailed payment schedules, and access past transaction history. Consider incorporating personalized budgeting tools that analyze spending habits and offer recommendations for responsible BNPL usage.

07 Financial Wellness Hub 

Financial literacy is key, especially for users new to BNPL options. Integrate a comprehensive financial wellness hub within the app. Offer informative resources on responsible credit usage, lease-to-own implications, and general budgeting tips. Consider including educational modules or quizzes to gamify the learning process and incentivize users to engage with financial wellness content.

08 Robust Security Measures 

Security is important when dealing with financial information. Implement industry-standard security measures like data encryption and multi-factor authentication to protect user data. Be transparent about data privacy practices and adhere to all relevant regulations. Consider offering in-app security resources to educate users on protecting their financial information and avoiding scams.

09 Proactive Communication & Timely Reminders

Don’t let late fees surprise users. Implement a system for sending timely push notifications and email reminders about upcoming payments and potential late fees. Personalize these reminders based on individual payment schedules to ensure they are relevant and actionable.

10 Multi-Channel Customer Support 

Offer multiple customer support channels to cater to user preferences. Include in-app chat functionality for quick questions, a toll-free phone number for more complex issues, and email support for detailed inquiries. Ensure customer support representatives are knowledgeable about BNPL products and lease-to-own agreements and can efficiently resolve user issues.

Steps To Develop A BNPL App Like FlexShopper

The BNPL market is booming, and FlexShopper’s success with lease-to-own for household goods demonstrates a strong niche opportunity. Here’s a roadmap to transform your BNPL app idea into reality, focusing on key development stages:

01 Market Research & Competitive Analysis

Before you start building, conduct thorough market research. Analyze trends, understand competitor strengths and weaknesses, and identify any gaps in the market. FlexShopper focuses on lease-to-own for household goods, but is there more to explore? Research your target audience, too. Who are they? Understanding their demographics, financial habits, and shopping channels is key for a user-centric app.

02 Business Model & Revenue Streams

With market research in hand, design a sustainable business model. Choose your revenue model: transaction fees for merchants, late fees for users, or a combination? Consider tiered subscription plans with additional features. Remember, BNPL regulations are evolving. Partner with legal and financial experts to ensure your model adheres to all regulations.

03 App Design & User Experience (UX)

A user-friendly interface is crucial. Prioritize a clean design with clear navigation and information. Ensure accessibility across all screen sizes. Onboarding new users should be effortless. Design a streamlined account creation process and consider tutorials or explainer videos to help users through the BNPL process and familiarize them with the app’s features and benefits.

04 Core Features & Functionality

Several core features are essential. Pre-qualification and spending limit tools empower users to assess their eligibility without impacting credit scores. Offer educational resources alongside these tools to promote financial literacy. At the heart of your app should lie a curated BNPL marketplace. 

Partner with reputable retailers to offer a diverse selection of household goods. Explore integrations with existing e-commerce platforms for wider product reach and a seamless user experience. Frictionless payment processing is key. 

Integrate a secure virtual credit card system for online purchases. For in-store transactions, enable users to initiate lease agreements by scanning receipts with the app’s camera or using QR codes. This eliminates paperwork and ensures a smooth transition.

05 Security & Data Privacy

Security must be a top priority. Implement strict security measures like data encryption, multi-factor authentication, and a secure backend infrastructure to protect user data. Prioritize data privacy by being transparent about data collection practices and adhering to all relevant regulations. Consider offering in-app security resources to educate users on protecting their information and avoiding scams.

06 Testing & Deployment

Rigorous testing is crucial. Internal testing will also be conducted, followed by beta testing with a representative user group, to spot and rectify any bugs or usability issues before launch. Don’t neglect App Store Optimization (ASO). Optimize your app’s title, description, and keywords for discoverability in app stores.

07 Post-Launch Optimization & Growth Strategies

The launch is just the beginning. Continuously monitor user feedback through surveys, app reviews, and analytics to identify areas for improvement. Use this data to enhance the app’s features and functionality over time. Develop a comprehensive marketing strategy to get to your target audience and drive user acquisition. Consider social media marketing, influencer partnerships, and collaborations within the FinTech space.

How Much Does It Cost To Develop A BNPL App Like FlexShopper?

Developing a BNPL app similar to FlexShopper can cost anywhere from USD 50,000 to over USD 250,000. The exact cost depends on the complexity of the app, the chosen development platform, the developer location, and whether you choose to outsource or build in-house. Here’s a breakdown to give you a general idea:

Feature/Component	Basic BNPL App (USD 50,000 – 100,000)	Moderately Complex BNPL App (USD 100,000 – 175,000)	Highly Complex BNPL App (USD 175,000+)
Project Management	5,000 – 10,000	10,000 – 15,000	15,000 – 20,000
UI/UX Design	5,000 – 10,000	10,000 – 20,000	20,000 – 30,000
Frontend Development	10,000 – 20,000	20,000 – 35,000	35,000 – 50,000
Backend Development	15,000 – 25,000	25,000 – 40,000	40,000 – 60,000
Payment Gateway Integration	5,000 – 10,000	10,000 – 15,000	15,000 – 25,000
User Authentication and Security	5,000 – 10,000	10,000 – 15,000	15,000 – 25,000
Database Management	2,500 – 5,000	5,000 – 10,000	10,000 – 20,000
Third-Party Integrations	2,500 – 5,000	5,000 – 10,000	10,000 – 20,000
Testing and Quality Assurance	2,500 – 5,000	5,000 – 10,000	10,000 – 20,000
Deployment and Maintenance	2,500 – 5,000	5,000 – 10,000	10,000 – 20,000
Advanced Features (e.g., AI, ML, Analytics)	–	10,000 – 20,000	20,000 – 40,000
Total Estimated Cost	50,000 – 100,000	100,000 – 175,000	175,000+

Remember, this is just an estimate. To get a more accurate idea of the development cost, it’s recommended to create a detailed project scope and approach mobile app development companies for specific quotes.

App Complexity

Simpler apps with basic features will naturally cost less compared to feature-rich apps with complex functionalities like curated marketplace integration or advanced security protocols. FlexShopper offers features like pre-qualification tools, lease-to-own agreements, and both in-store and online transactions, making it a moderately complex app.

Platform Development

Will you develop for iOS, Android, or both?  Developing multiple platforms increases the cost as you’ll need to create separate codebases or consider cross-platform development tools that might require additional licensing fees.

Development Team Location

The cost of hiring developers depends on the location. Generally, developer rates are highest in North America and Western Europe, followed by Eastern Europe and Asia.

In-House vs. Outsourcing

Developing the app in-house gives you more control but requires hiring and managing a development team. However, outsourcing to an app development company can be more cost-effective but necessitates careful selection of a reliable partner with experience in BNPL app development.

How Does A BNPL App Generate Revenue?

BNPL apps have emerged as a disruptive force in the financial landscape, offering a convenient and flexible way for consumers to manage their purchases. But how do these apps translate user convenience into revenue for the BNPL provider? Here’s a deeper dive into the key revenue streams:

Transaction fees

This is a trusted and predictable source of income. The BNPL provider charges merchants a fixed fee for each transaction processed through the platform, regardless of the purchase amount. This incentivizes the BNPL provider to streamline the user experience and ensure a smooth checkout process to encourage frequent transactions.

Percentage commissions

An alternative approach involves charging merchants a commission based on the total transaction value. This can be beneficial for BNPL providers as it aligns their interests with the merchants’ – encouraging the promotion of larger purchases through the BNPL platform. This model can also incentivize the BNPL provider to offer competitive interest rates or late fee structures to attract higher-value transactions.

Late fees

While many BNPL services promote interest-free payments, late fees are a crucial revenue stream. These fees are typically charged for missed payments or outstanding balances that exceed the specified grace period. The potential for late fees encourages users to be responsible for repayment behavior while generating income for the BNPL provider.

Subscription fees

Some BNPL apps are exploring premium features or tiered membership models. These subscriptions offer benefits like extended payment terms, increased purchase limits, or exclusive rewards programs. Subscription fees can provide a recurring revenue stream that complements transaction and late fees.

Data monetization

The vast amount of anonymized customer spending data collected through BNPL transactions holds significant value. This data can provide valuable points into customer behavior, spending habits, and purchasing trends.

By anonymizing and aggregating this data, BNPL providers can potentially monetize it through partnerships with marketing firms or other businesses interested in consumer insights. This can be a good revenue stream, especially as the BNPL user base grows.

Value-added services

Some BNPL providers are venturing into offering additional financial services within their app ecosystem. This could include budgeting tools, financial literacy resources, or partnerships with credit bureaus to help users build credit history through responsible BNPL usage. 

These value-added services can not only increase customer engagement but also open doors for potential revenue streams through premium features or partnerships within these services.

Latest Trends In BNPL App Development

Here’s a glimpse into the innovative trends shaping BNPL apps:

01 From Simple Financing to Financial Wellness Hubs

BNPL apps are moving beyond basic buy-now-pay-later functionalities. They’re incorporating features like budgeting tools, financial literacy resources, and credit score tracking to empower users to manage their finances responsibly. This focus on financial wellness fosters trust and builds long-term user engagement.

02 AI-Powered Credit Assessment and Personalized Limits

Artificial intelligence (AI) is transforming BNPL apps. AI algorithms can interpret user data to offer more accurate credit assessments and offer personalized spending limits. This not only benefits users by potentially increasing their spending power but also reduces risks for BNPL providers.

03 Subscription Models and Value-Added Services

Subscription plans are gaining traction in the BNPL space. These plans might offer users benefits like extended payment terms, increased purchase limits, or exclusive rewards programs. Additionally, some BNPL apps are exploring partnerships with other financial service providers to offer value-added services within the app itself, such as access to investment accounts or discounted insurance products.

04 In-Store Integration and Omnichannel Experiences

While online shopping remains a major driver of BNPL usage, seamless in-store integration is crucial for wider adoption. Look for advancements in technologies like QR code scanning and near-field communication (NFC) to streamline the in-store BNPL experience. The goal is to create a smooth omnichannel experience where users can seamlessly transition between online and offline purchases using the BNPL app.

05 Data Security and Regulatory Compliance

As BNPL usage grows, so does the focus on data security and regulatory compliance. BNPL app developers are implementing robust security measures like data encryption and multi-factor authentication to protect user financial information. Additionally, staying informed of evolving BNPL regulations and adapting the app accordingly is essential to ensure legal and financial compliance.

Conclusion

The BNPL market presents a golden opportunity for US businesses and entrepreneurs. By following the insights shared in this blog post – from market research and competitor analysis to app development, testing, and launch – you can develop a winning BNPL app that caters to your target audience and stands out in the market.

Remember, the BNPL market is a constantly evolving and competitive space. Rather than following the next best thing, you can create an app which is unique and focuses on a particular niche. With dedication and a focus on innovation, your BNPL app can become a major player, driving financial inclusion and empowering users to manage their finances responsibly.

Get started on your app development journey today!

How Can Idea Usher Help With BNPL App Development?

The BNPL market is growing exponentially, and Idea Usher is here to be your trusted partner in navigating this exciting space. With over 500,000 hours of coding experience dedicated to the field, our team of experts possesses the knowledge and skill to craft a BNPL app that stands out.

We don’t just code; we strategize. We’ll work closely with you to understand your vision, target audience, and desired functionalities. Our expertise extends beyond development – we’ll guide you through market research, competitor analysis, and business model design to ensure your BNPL app is built for success.

Ready to take your BNPL app idea from concept to reality?  

Contact Idea Usher today for a free consultation. Let’s leverage our combined expertise to make your mark in the thriving BNPL landscape.

FAQs

How to Develop a Buy Now, Pay Later (BNPL) App

To develop a BNPL app, start with thorough market research to know your audience and competition. Define core features such as user authentication, payment integration, and installment management. Design an intuitive UI/UX, then proceed with frontend and backend development. Integrate necessary third-party services and ensure robust security. Test the app extensively for bugs and usability issues before deploying it on relevant platforms, and provide ongoing maintenance and updates.

How Much Does It Cost to Develop a BNPL App?

Developing a BNPL app can cost between USD 50,000 to USD 100,000 for a basic version, USD 100,000 to USD 175,000 for a moderately complex app like FlexShopper, and USD 175,000+ for a highly complex app with advanced features. These costs cover project management, design, development, payment integration, security, testing, and deployment.

Is BNPL Profitable?

BNPL can be highly profitable if well-executed. Profitability comes from merchant fees, late payment fees, and interest on installment plans. BNPL services boost merchant sales by offering flexible payment options, which can increase conversion rates. Success depends on user base, transaction volume, fee structure, and effective risk management.

How Do BNPL Platforms Make Money?

BNPL platforms earn money primarily through merchant fees, ranging from 2% to 8% of the transaction value. They also charge late payment fees and may earn interest on extended installment plans. Additional revenue comes from affiliate marketing and data monetization. Effective risk management and customer service are crucial for maintaining profitability.