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Buy Now Pay Later Software Development: Quick Guide

E-Commerce has been showing unprecedented growth since the Covid-19 pandemic hit the world and it’s proceeding to surpass the forecasted levels. According to Adobe’s research, e-Commerce business increased up to $183 billion, reaching the total sum of $884 billion spent online from March 2020 to February 2021. And 2022 is predicted to become the first trillion-dollar year for e-Commerce.

why buy now pay later

The E-Commerce industry is attracting massive investments, resulting in the adoption of new technologies and presenting new payment methods. One of the recent trends in e-Commerce is the Buy Now Pay Later payment method. It showed a 215% growth from January to February 2021. More and more retailers are adopting this service, providing a better customer experience, attracting new consumers, and increasing businesses revenues.

In this article, we’ll look into what is Buy Now Pay Later, what are the key features of this service, how does Buy Now Pay Later work, and what factors do you need to consider when building your Buy Now Pay Later apps.

Buy Now Pay Later: How It Works

Buy Now Pay Later (BNPL) is a service of delayed payment similar to getting a loan or paying with a credit card. Using this service, shoppers can buy their products online in equal installments over a certain period of time, e.g. several months or weeks.

BNPL is a more convenient method of delayed payments than taking a loan from a bank or ordering a credit card. It allows customers to make instant purchases without the necessity to wait for time-consuming bank loan approvals. Moreover, BNPL charges little to no interest if customers pay their installments on time.

The Covid-19 has triggered a rapid surge in BNPL’s popularity as it provides more flexible financing options and low-interest fees. Therefore, those customers who experienced financial hardships during the pandemics can still afford to buy online. Whereas the BNPL providers can generate substantial revenues based on an increased number of customers who pay small to no interest fees and merchants who are charged for using the BNPL payment method to attract more buyers.

Key Features of a Buy Now Pay Later App

Buy Now Pay Later apps have become a popular solution for many in a short time.

buy now pay later modelHere are the key features that made the BNPL payment method became so attractive for all segments of society in such a short interval.


The BNPL payments became an alternative solution for those customers who don’t use credit cards, have unstable income or wanted to conserve their cash in case of emergency during the pandemics. For example, these social groups include:

  • Millennials and Generation Z – according to the Ascent’s search, 67% of Millenials don’t possess any credit cards and prefer using debit cards, cash, and mobile banking apps to pay for their purchases; while 66% of Gen Z aren’t ready to pay bank fees;
  • low-income households – use BNPL solution as an alternative to expensive credits and opening accounts in high-street banks;
  • workers who lost their working places during the pandemic – employees from various industries being currently unemployed found the Buy Now Pay Later model to be a feasible way to buy goods.

BNPL businesses require a soft credit check for its approval, therefore, more people with insufficient credit history can use this service and make small purchases, paying for them in parts.

Instant Sign up Process

When opting for the BNPL payment method, consumers don’t have to spend hours or days to get their loans approved. Anyone can quickly sign up for the service and have the loan at their disposal by the time they get to the check-out section on a website. Whereas credit cards may require days or even weeks to approve all the papers and undergo the KYC (Know Your Customer) checks.

Low-Cost Pricing Model

With BNPL service, the purchase sum is divided into equal parts. Consumers need to pay the first part and the rest should be paid at certain dates with little to no interest fees. When customers use their credit cards, they are required to make a minimum monthly payment and the remaining sum accrues interest until all the credit is entirely paid off. This way, by using the BNPL payment method, buyers purchase the needed goods for the minimum overpayment.

Convenient Payment for Purchases

Buyers can pay for BNPL service using checks, bank transfers, debit or credit cards, and bank accounts automatically. Moreover, some BNPL companies require consumers to pay the loans in biweekly or month-long periods and can extend them to up to six months or even longer terms in case of any payment difficulties.

Factors to Consider During Buy Now Pay Later App Development

When creating their own BNPL apps, businesses need to consider the factors that directly influence the success of the built app. Here is what you need to consider to make your BNPL solution look attractive to the buyers.

Software Development Process

In FinTech software development it’s essential to have a strong team of programmers and a well-established development process. They ensure that your BNPL app will be effective, secure, and adjusted to the needs of your customers. Here is what your business could do to improve your BNPL app development:

  • hire a team of FinTech professionals who use the most effective software development methodologies in their work and can implement the latest technologies for building your app;
  • decide on the features you want to include in your app and its design; they could be FinTech Big Data solutions for effective analytics and personalized services, Blockchain and Cryptocurrency for strong protection and cryptopayments, various payment types like mobile payments, personal finance management, e-Commerce payments, and much more;
  • choose a proper Tech stack that will determine the efficiency and security of your product;
  • establish your success metrics to define when your app is making improvements in its functionality and if it meets your customers’ needs best.

Customer Experience and Convenience

For a BNPL app to be attractive for customers it should precisely address their pain points, be well-designed, and be easy to use. To understand your customers’ needs better, you could opt for product development in phases.

how does very buy now pay later work

Start with the creation of MVP and its quick release to the market and then study your customers’ feedback. This way, you’ll be able to change your product in line with your customers’ requirements and make it more convenient for