How to offer buy now, pay later on Shopify: A complete guide for merchants

Wondering how to offer pay later on Shopify? That's the power of Buy Now, Pay Later! BNPL allows shoppers to chunk purchases into smaller amounts with no interest, giving them flexibility to shop within their budgets. With the rapidly growing popularity of BNPL, it's easy to see why 72% of U.S. consumers plan to use it in the next year, particularly Gen Z and millennials. 

As a Shopify store owner, implementing a BNPL solution can encourage significant growth for your store. Studies show that merchants offering BNPL solutions experience increases in average order value by 50% and up to 28% lower cart abandonment! Simply put, buy now pay later provides higher conversion rates and higher AOV while giving customers a more cost-effective and customer-friendly way to purchase.

What is buy now, pay later (BNPL)?

Buy Now, Pay Later (BNPL) helps to make large purchases, feel small. It helps to break down payments at checkout into smaller payments. For shoppers, this means often, four interest-free payments (one upfront, three later), or longer financing options anywhere from 3 – 12+ months. Plus, you can pay off your balance early, and there's no penalty! Late payment fees tend to be relatively low compared to missed fees through credit cards.

For merchants, BNPL providers pay the full order value upfront. Once a customer chooses BNPL, the provider funds the purchase immediately, then collects installments directly from the buyer. This means merchants get paid quickly (typically within 1–3 business days) and take on zero credit risk. Providers also handle fraud checks, credit approval, and repayment. 

The result: shoppers enjoy flexibility and affordability, while merchants benefit from higher sales, faster cash flow, and virtually no risk.

Why should Shopify merchants offer BNPL?

Using  BNPL can lead to significant gains for your store. New stats showed that merchants using Shop Pay Installments (Shopify’s built-in BNPL) saw up to a 50% lift in average order value, as well as a 28% decline in cart abandonment rate. In general, BNPL increases checkout conversion rates by ~78% while reducing the abandonment rates by about 10%. 

Since payments all route through Shopify Payments (or whatever BNPL provider), you still receive payment up front, which helps with cash flow. In other words, the customer pays later, while you get paid! 

BNPL also attracts younger, ready-to-buy shoppers. It appeals to buyers of higher ticket items, which is why Klarna reports merchants using its BNPL service see a 23% increase in AOV. In short, BNPL helps hesitant buyers check out faster and spend more.

Shopify merchant benefits: 

• Shop Pay Installments (by Affirm) is native to shopify.com. 
• No apps or setup are necessary. 
• Just click to enable in checkout settings. 

Shopify also supports built-in POS and BNPL access to millions of Shop Pay users, making BNPL a necessary part of your revenue acquisition toolkit on the Shopify platform.

Top buy now, pay later providers for Shopify in 2025

Buy Now, Pay Later (BNPL) options have become an essential tool for Shopify merchants, boosting conversions and average order value by giving customers more flexibility at checkout. Here are the best Buy Now Pay Later apps for Shopify 2025 and what makes each of them stand out.

1. Shop Pay Installments (Affirm)

• Payment options: Customers can pay orders of  $50 to $999 in 4 biweekly interest-free payments or orders $150–$17,500 over 3–12 monthly payments (10–36% APR), powered by Shopify Shop Pay Installments.
• Fees: No extra "hidden" fees for refund, and merchants pay Shopify Payments fees (2.4-2.9% + $0.30) and Affirm's financing fee (estimated 5-6% per transaction, for installments). Fees only apply to customers using installments.
• Features: Shop Pay is native to Shopify - no separate signup - complete online and POS integration. Merchants receive payment in 1-3 business days. 
• Unique value: Easiest to sign up and set up (just check a box in settings), seamless one-click checkout for customers, and great analytics. Good for stores of any size on Shopify.

2. Klarna

• Payment plans: Offers Pay in 4 (one payment upfront, then three installments over 6 weeks, interest-free), Pay in 30 days (full payment in 30 days, interest-free), and longer options (3-24 months) with 0-35.99% APR.
• Fees: Merchants typically pay 3.29% + $0.30 per Pay-in-4 transaction, and 3.99-5.99% for the longer-term financing transaction. There is no setup or monthly fees at all. You get paid upfront on the day of purchase by Klarna.
• Features: Klarna is the most recognized BNPL brand worldwide. When shoppers see the Klarna name and app, they are more likely to trust it. Klarna has flexible credit limits based on its "Purchase Power" underwriting system.
• Unique value: Klarna is especially popular in both Europe and North America and will appeal to customers who want repayment flexibility. Merchants see big boosts in AOV when they offer Klarna. If your audience is younger and international, Klarna may be a good choice.

3. Afterpay

• Payment plans: Divides purchases into four equal biweekly payments, always interest-free (as long as the payments are made on time). Ideal for orders less than around $1,500.
• Fees: Merchants pay a transaction fee (usually 4-6% + $0.30). Customers pay no interest unless they are late because Afterpay takes on the risk.
• Features: Afterpay is a top-tier BNPL option in the US and Australia and is recognized by the younger generation. An easy installation via the Shopify app, and payments are typically deposited to merchants within 1-2 business days. Afterpay offers a merchant portal with sales reports.
• Unique value: Very straightforward model (no interest, fixed 4 payments) that customers easily understand. A good option if most of your orders fall into a mid-price range (generally ~$400 and below).

4. Sezzle

• Payment plan: Standard 4 installments; 6-week plan (25% down at purchase, 3 x 25% payments bi-weekly) with no interest for eligible borrowers. Customers can also push their due dates a maximum of 2 weeks for more payment flexibility.
• Fee: Merchants pay roughly 6% + $0.30 per transaction (higher than most alternatives). Sezzle assumes ALL customer credit checks and risk. 
• Features: Catering to US small to mid-size merchants. Has a "Sezzle Up" feature for the customers to build up their credit. Shoppers appreciate the visibility plus a simple-to-use app. 
• Unique value: Good fit for small Shopify stores trying to expand beyond payment options and starting to include installment payments. This Shopify buy now pay later service is interest-free to buyers and is available for checkouts, even for customers with no credit card. 

How to add buy now pay later on your Shopify store

Adding Buy Now, Pay Later (BNPL) to your Shopify store is easier than you think. Whether you use Shopify’s own Shop Pay Installments or third-party apps like Klarna and Afterpay, setup takes just a few clicks. Here’s a simple step-by-step guide to enable it:

1. Enable Shopify payments & Shop Pay

Go to Settings > Payments in your Shopify admin. Make sure Shopify Payments is active. BNPL won’t work without it.

2. Access Shop Pay settings

Click Manage under Shopify Payments. Find Shop Pay in the list of payment options. If it isn’t enabled, check it and save.

3. Turn on installments 

Within Shop Pay settings, check Shop Pay Installments (usually located right below Shop Pay). This activates BNPL, giving customers “Pay in 4” or monthly options at checkout.

4. Save your changes

Click Save. Test with a small real transaction to confirm that installments are live in your store.

5. Add third-party BNPL apps (optional)

To offer Klarna, Afterpay, Sezzle, or others, install their apps from the Shopify App Store. Follow the setup prompts and connect your account. Once done, those BNPL options will appear at checkout alongside Shop Pay. 

And that’s it! You have successfully enabled the BNPL feature on your Shopify store in minutes.

Also Read: How to handle invoices for out-of-stock items in your Shopify store

Tips for successfully using BNPL on Shopify

BNPL can boost conversions, but only if customers know it’s available. From product pages to checkout, here’s how to highlight and market your installment plans for maximum impact.

1. Promote BNPL options: 

Highlight “Pay later” on product pages, carts, and banners so shoppers instantly know the option exists. Shopify even provides ready-made marketing assets (ads, banners, stickers) for Shop Pay Installments to make BNPL promotion simple.

2. Use BNPL for premium items: 

BNPL shines on higher-ticket products. Bundle or upsell accessories when offering installments, since flexible payments often boost cart size. 

3. Pair with STOQ tools: 

If stock runs out, keep customers engaged. Use STOQ’s back-in-stock alerts or preorder features so shoppers can commit now and pay later with BNPL. Preorders plus installments transform stockouts into recovered sales.

4. Optimize checkout experience: 

Make BNPL visible at checkout and keep forms short (Shop Pay does this automatically). Be upfront about terms like interest or late fees in your FAQ so customers feel secure using installments.

Also Read: How to Build a high-converting ‘coming soon’ page on Shopify 

Conclusion

Buy Now, Pay Later is no longer optional; it’s a must-have for today’s Shopify merchants. With most shoppers adopting installment payments, BNPL can meaningfully grow revenue by securing sales that might otherwise be lost. It lifts average order values, lowers cart abandonment, and makes larger purchases feel manageable.

Combining BNPL with STOQ’s preorder and back-in-stock tools makes the strategy even stronger: BNPL provides flexible payments, while STOQ prevents lost revenue from stockouts. In effect, every potential customer always has a clear path to purchase.

Enable BNPL in your Shopify store now and pair it with STOQ to secure every possible order – even when products are temporarily sold out. Together they form a powerful revenue-recovery system to grow your store in 2025 and beyond.

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