Buy Now Pay Later (BNPL). The Future Of Online Shopping In Nigeria

The Buy Now, Pay Later (BNPL) market in Nigeria has been growing rapidly. More people are doing online shopping these days and looking for flexible payment options, making BNPL popular.

BNPL services allow customers to buy products immediately and pay for them later, either in installments or in full after some time. Unlike credit cards or bank loans, these services often come with little to no interest, making them more attractive to shoppers.

In Nigeria, BNPL works the same way as in other countries. It helps people who don’t have enough cash at the moment or prefer to spread out their payments. This has led to an increase in both local and international companies offering BNPL services in the country.

With the rise of e-commerce and the need for convenient payment options, BNPL is expected to keep growing in Nigeria, giving more consumers access to the products they need without immediate financial strain.

How Does BNPL Work?

When shopping online, customers can choose to get their products immediately and pay later. They can either pay the full amount after 30 days or split the cost into smaller payments over time.

Most BNPL plans allow buyers to make three or four equal payments, which are automatically deducted from their payment card. As long as they pay on time, there are no extra charges or interest.

For businesses that offer BNPL, they pay the service provider a fee for each transaction. This includes a commission of 2–6% plus a fixed amount.

5 Advantages of using BNPL

Attracts new customers.

One big challenge for online shopping is that customers can’t see, touch, or try products before buying. Many people want to feel the fabric of clothes or check if shoes fit before making a purchase. Buy Now, Pay Later (BNPL) services help solve this problem by making online shopping more flexible.

With benefits like free returns and customer support, BNPL makes it easier for people to shop with confidence. It reduces risks for buyers and encourages more purchases.

Some businesses see free returns as an extra cost, but they are now an important part of online shopping. Most customers check the return policy before buying, and try to avoid stores with strict return rules.

Companies that treat returns as a way to build trust and improve customer relationships are more likely to grow and succeed.

Increased sales.

Buying expensive items can be difficult, whether it’s the large amount of money leaving your account at once or the fear of high credit card interest rates. This is one reason why Buy Now, Pay Later (BNPL) is helping more people complete their purchases.

Study show shows that the main reason shoppers abandon their carts is price. When stores offer installment payment options, it makes the cost feel more manageable, reducing hesitation and increasing sales.

Better customer experience.

The younger generation enjoy shopping, just like other generations. They love browsing for products and prefer fast, hassle-free delivery. However, more than anything, they expect a smooth and enjoyable shopping experience.

If businesses want to attract and keep younger customers, they must first focus on creating a user-friendly platform. The shopping process should be simple, convenient, and efficient. This foundation is more important than reward programs or loyalty schemes. Without a well-designed shopping experience, extra perks won’t be enough to keep customers coming back.

Increased cash flow

Merchants do not have to wait for customers to pay in full when using Buy Now, Pay Later (BNPL) services. While shoppers make their payments over time, the BNPL provider usually pays the merchant upfront. This allows businesses to receive their money faster, improving their cash flow. With better liquidity, merchants can manage their expenses more easily, invest in growth, and keep their operations running smoothly.

Convenience

Getting approved for Buy Now, Pay Later (BNPL) is usually fast and simple. The application process is easy to complete, and decisions are often made quickly. This gives shoppers a convenient way to pay right at checkout without delays. With BNPL, customers can enjoy their purchases immediately while spreading the cost over time, making shopping more flexible and stress-free.

Top Buy Now Pay Later eCommerce Service Providers

With the growing popularity of Buy Now, Pay Later (BNPL), more businesses are starting to offer this payment option. If you run an online store, you have several BNPL providers to choose from that you can easily integrate into your checkout process. Here are some of the leading companies in the industry:

Klarna

Klarna is a well-known Buy Now, Pay Later (BNPL) option that provides both flexibility and security for shoppers and businesses.

One of its biggest advantages is letting customers delay full payment. They can either pay in installments or postpone the total amount to a later date. This flexibility often encourages higher spending, helping businesses increase their average order value.

Klarna offers several benefits, including upfront payments to merchants, customizable payment options, easy integration, and insights into customer shopping trends.

Merchants using Klarna pay a $0.30 transaction fee plus a variable percentage fee between 3.29% and 5.99%, depending on the purchase amount.

For those using Klarna’s Instant Shopping solution, there is a $30 monthly fee, a $0.30 transaction fee per sale, and percentage fees of up to 3.29% for onsite purchases and 3.79% for offsite purchases.

Affirm

Affirm is a great choice for adding Buy Now, Pay Later (BNPL) to an online store. Setting it up is easy and works with most major e-commerce platforms.

For store owners, this means a smoother checkout process with BNPL as a payment option. Customers benefit from clear and simple payment terms, making their purchases easier to manage.

Affirm helps reduce cart abandonment and increases sales by offering a pay-over-time option. It provides different interest rates, ranging from 0% to 35.99%, with no hidden fees. Customers can choose to make interest-free payments every two weeks or monthly payments with a fixed APR, depending on the purchase amount.

Affirm also offers a “Pay in 4” plan, which is always interest-free. However, Stripe charges a processing fee of 6% + $0.30 per transaction for Affirm payments.

Afterpay

Afterpay is a flexible payment option that works for businesses of all sizes. Setting it up is quick and simple, and it divides payments into four easy installments, with the merchant receiving full payment right away.

The service encourages responsible spending by setting spending limits and capping late fees.

Merchants pay fees ranging from 4% to 6%, plus a $0.30 fee per transaction. Additionally, merchants are responsible for charge back fees and must provide evidence to support any claims.

Apple Pay Later

Apple Pay Later brings the trusted technology of Apple to the Buy Now, Pay Later (BNPL) world.

It’s an easy-to-use service with no interest, no fees, and a strong focus on privacy and security. Customers can split purchases between $75 and $1,000 into four equal payments over six weeks.

The setup is quick and simple, with no extra apps or passwords needed. You can also take advantage of Apple’s large user base and have all payment details organized in the Wallet app.

Customers get helpful reminders and one-on-one support, which helps encourage better spending habits.

For store owners, Apple Pay Later doesn’t charge extra fees, but regular fees from payment processors or banks still apply, as Apple Pay acts as an intermediary for card payments.

Sezzle

Sezzle offers several benefits for eCommerce store owners. It helps increase sales by reaching more customers and encouraging repeat purchases. Many shoppers who use Sezzle return for future orders, making it a valuable tool for long-term growth.

Sezzle is especially popular among Millennials and Gen Z, giving younger consumers more financial flexibility while also helping them build credit.

For each transaction, Sezzle charges a $0.30 flat fee plus 6% of the purchase amount. Store owners who process less than $300 per month in Sezzle transactions must also pay a $15 minimum monthly fee.

Sezzle is also a certified B-Corp, showing its commitment to social responsibility. This can make it a good choice for businesses that want to align with purpose-driven values.

PROCESS OF BNPL

To use Buy Now, Pay Later (BNPL), customers need to apply during checkout or before starting their purchase. The application is simple and requires basic personal and business details. Approval is usually instant, and the credit limit depends on the customer’s credit score.

At checkout, shoppers can choose BNPL as their payment option. In Nigeria, payment plans typically range from weekly to monthly installments. If the customer’s credit limit is enough to cover the purchase, they can complete the order and secure the loan.

For repayment, customers can either pay in installments or as a lump sum. Interest charges are added based on the loan terms.

Conclusion

As younger generations gain more buying power and credit cards become less popular, the demand for flexible payment options is expected to grow.

Buy Now, Pay Later (BNPL) offers a convenient alternative that allows customers to spread their payments over time without worrying about high-interest fees. This makes BNPL a strong competitor to traditional credit cards and a game-changer in the payments industry.

With the world becoming more digital, financing options like BNPL will continue to expand. Businesses that want to stay ahead and adapt to changing customer needs can benefit from adding BNPL to their payment options.

By kingkentus