In retail or online shopping, payment methods matter a lot. When customers reach checkout, how you let them pay can determine whether they complete the order, and how much they spend. Offering a modern payment option like Buy Now, Pay Later (BNPL) alongside traditional Credit Card payments gives customers more control and can help merchants grow sales and order size.
Using a strong payment gateway that supports BNPL or credit card payments means you can offer flexible payment options. If implemented well, this flexibility attracts customers who otherwise hesitate and helps businesses secure more conversions and larger orders.
When looking at BNPL vs credit card payments, there’s no single solution that fits every business. Understanding the pros and cons helps merchants choose the right option or use both effectively.
| Table of Contents: 1. What Are BNPL and Credit Card Payments? 2. Why BNPL Can Be Especially Appealing for Merchants 3. Strengths of Credit Cards 4. BNPL vs Credit Card: What Merchants Should Think About 5. Conclusion 6. FAQs |
What Are BNPL and Credit Card Payments?
1. BNPL – Simple, Flexible Payments
With BNPL, customers can choose to pay for a purchase in installments rather than paying the full amount immediately. These installments are often interest-free (if paid on time), making expensive purchases easier to manage. This flexible payment option reduces the upfront financial burden and appeals especially when customers want affordability without a credit card.
Many BNPL providers integrate via an EMI payment gateway or payment system at checkout. That means buyers can get advantage from BNPL payments without complex credit card requirements.
2. Credit Card Payments
Credit cards have long been a standard tool for consumers. With credit card payments, customers can pay in full or carry a balance, depending on their monthly billing cycle.
However, credit cards also come with drawbacks for consumers, such as annual fees and high interest charges. For merchants, credit card payments are widely accepted, but they don’t always ease the upfront cost concern, especially when customers are considering high-value purchases.
Why BNPL Can Be Especially Appealing for Merchants?
1. Flexible Payments Lower Entry Barrier
Many customers are not comfortable with a high price tag. But BNPL allows them to spread the cost over time, making the price more manageable. This flexibility protects sales that might otherwise be lost. With alternative payment methods, more customers proceed through checkout. Thus, BNPL for merchants often leads to higher conversion rates and larger cart sizes.
2. BNPL Drives Higher Cart Value and More Premium Purchases
When customers know they can pay over time, they may be more willing to choose premium versions of products, or add extras and accessories. This effect often increases the total order value, making BNPL a powerful tool for upselling and cross-selling.
Merchants who integrate BNPL via a proper EMI payment gateway see higher average order values and greater revenue, especially for higher-value goods where upfront payment might have been a deterrent.
3. Appeals to Customers Without Credit Cards
Not everyone has a credit card, and many potential buyers may avoid using cards because of interest or debt concerns. BNPL offers an alternative payment method for these customers.
For such buyers, BNPL payments offer a simpler option: flexible payments without needing a credit card. This expands the market to include customers who otherwise might skip high-value purchases.
4. Faster & More Transparent Checkout Process
BNPL offers quick approval, simple checkout steps, and fixed installments rather than revolving credit. The simplicity and transparency make checkout easier and more attractive for customers. For merchants, integrating a payment gateway that allows flexible payment options eases conversion optimisation.
5. Control over Costs and Customer Trust
Credit card payments come with interest rates, fees (annual or late), and potential user hesitation. BNPL payments, especially interest-free ones, often feel safer and more predictable to customers.
For merchants using an established BNPL payment gateway lets them manage risk, get upfront settlement (in many cases), and give customers affordability and flexible payment options.
Strengths of Credit Cards
While BNPL offers many advantages, credit card payments remain strong in some areas:
- Wider acceptance & universality: Credit cards are accepted almost everywhere, online and offline, domestic and international.
- Perks & rewards: Many card users enjoy bonuses, cashback, points, or purchase protection, benefits that BNPL generally doesn’t offer.
- Credit building: Responsible use of credit cards helps build a credit history, something that BNPL might not support as strongly, depending on provider practices.
BNPL vs Credit Card: What Merchants Should Think About?
When deciding between BNPL and credit card payments (or offering both), merchants should weigh:
- The type of products being sold – high-value items benefit most from BNPL.
- Customer base – younger audiences or those without cards may prefer BNPL.
- Margins and costs – BNPL providers may charge fees, so profit margins should accommodate them.
- Checkout experience – integrating a seamless payment gateway that supports both BNPL and credit card payments improves the overall user experience and optimises conversion.
- Transparency and clarity – customers should clearly see instalments, interest, and repayment schedule at checkout.
Conclusion
There’s no single winner when comparing BNPL vs credit card payments. Both offer important benefits under different circumstances. For merchants focused on increasing conversions, making premium products accessible, and offering flexible payment options, especially for high-value goods, BNPL is a powerful tool.
By integrating BNPL via a robust payment gateway and offering customers the choice between BNPL and credit card payments, businesses can maximise reach, improve checkout conversion rates, and increase average order value.
FAQs
Q: What is BNPL vs credit card payments?
BNPL lets customers split purchase cost into instalments; credit card payments either charge upfront or let customers pay later with interest.
Q: Why should merchants add BNPL option?
BNPL attracts price-sensitive buyers and increases purchase likelihood, especially for expensive items, boosting sales and average order value.
Q: Are BNPL payments good for conversion optimisation?
Yes. Flexible payment options reduce upfront price hesitation, improve checkout conversion rates, and increase the likelihood of completing an order.
Q: Do credit cards still matter for merchants?
Definitely. Credit cards offer global acceptance, rewards, and appeal to buyers preferring full payment or credit benefits over instalments.
Q: Can offering both BNPL and credit card payments increase sales?
Yes, providing both flexible payment options and traditional payments gives customers choice, expanding reach and improving conversion chances.
