BNPL – Buy Now Pay Later
Klarna, PayPlus, Afterpay — interest-free installment payments. Raises AOV by 20-30% but carries a 2-6% fee.
In practice
BNPL works when the customer is deterred by a large amount. $150 as 4 x $37.50 becomes a purchase that wouldn't have happened otherwise.
Common misconception
'BNPL suits every store.' On products under $50, it makes no difference. It's effective above $80.
How to fix it
Not increasing conversions? (1) is it visible next to the price on the product page? (2) does the customer recognize the provider (Klarna isn't as well-known in Israel as PayPlus)?
Example
A home goods store: AOV of $115 plus Klarna's '4 x $29' raised conversions by 22% on items over $95. Margin dropped 4% but volume rose 34%.
Priority
Use BNPL if AOV exceeds $80 and gross margin exceeds 35%.
Related terms
Keep learning. Metrics that touch the same area:
- Gross MarginFinance(Sale price - COGS) / sale price × 100. The basis for every pricing and advertising decision.
- ChargebackPaymentsA customer disputing a charge through their bank. Costs the merchant: a $7-15 fee plus the lost amount. Above 1% puts the account at risk.
- Payment GatewayPaymentsA service for accepting payments. Stripe, PayPal, Tranzila, Cardcom. Fee: 1.4-3.5% plus a fixed amount.
- PCI DSSPaymentsSecurity requirements for any business handling credit card data. Non-compliance means fines and account termination.
- Refund PolicyPaymentsThe terms and process for refunding a customer. A generous policy raises conversions by 18% on average.
- TokenizationPaymentsReplacing a credit card number with a unique string (a token) for storage and reuse. Enables repeat charges without storing card details — reduces breach risk and supports PCI DSS compliance.
Jimmy tracks your BNPL – Buy Now Pay Later, automatically
WhatsApp alerts when something important changes. No dashboards, no hassle.