Seven out of ten online shoppers add items to their cart and leave without buying. That is what a 70% cart abandonment rate looks like. For most ecommerce businesses, it represents significant lost revenue. The reasons are well-documented: unexpected costs, long checkouts, and affordability concerns. Buy now pay later directly addresses that last barrier. When shoppers can pay in instalments instead of paying the full amount upfront, completing a purchase becomes a much easier decision. Here is how BNPL works, why it reduces cart abandonment, and how to implement it on your store.
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Why Shoppers Leave Without Buying?
Studies consistently point to the same reasons for cart abandonment: unexpected shipping costs or taxes, mandatory account creation, complicated checkout processes, and limited payment options. Affordability is not a primary concern, and it often sits quietly behind several of these. As a result, a shopper who is unable to make a full upfront payment will eventually leave, even if they genuinely want the product. This is where flexible payment options make a measurable difference.
How BNPL Works at Checkout?
A pay later option lets customers split their total into smaller, manageable instalments — usually interest-free. The merchant receives the full payment upfront through the payment processing partner; the customer repays over a set schedule. From the shopper’s side, the process is quick:
- Select “Pay Later” or “EMI payment” at the checkout payment gateway
- Choose a plan – 3, 6 or 12 instalments
- Complete a quick verification and confirm the order
- Receive the product immediately and repay as scheduled
How BNPL Reduces Cart Abandonment?
Removes the affordability barrier. A ₹20,000 product begins to feel more affordable when it is split into four payments of ₹5,000. This single change can significantly improve checkout conversion, especially for high-value categories like electronics, furniture, and fashion.
Reduces hesitation. When the full cost feels manageable, shoppers decide faster. The shop now pay later model shortens the mental deliberation that leads to abandonment.
Increases average order value. Customers using instalment payments tend to spend more per transaction. When the immediate financial impact feels smaller, shoppers are less inclined to remove items from their cart.
Broadens your customer base. Not every shopper owns a credit card. BNPL reaches customers who want purchase now pay later flexibility without formal credit applications — particularly younger shoppers. Studies show 56% of millennials and 49% of Gen Z prefer BNPL over traditional credit.
Lifts conversion rates. Ecommerce stores offering buy now and pay later see a measurable 2.1% increase in average conversion rates. Some merchants report cart abandonment dropping by 10% or more after enabling this option.
How to Add BNPL to Your Ecommerce Store?
Step 1: Choose the right payment gateway. Start with an ecommerce payment gateway that includes BNPL or EMI options natively. A payment gateway for ecommerce site that bundles cards, UPI, wallets, and instalment payments under one integration keeps your setup clean. PayU is a trusted online payment gateway for thousands of Indian businesses — it supports flexible payment options including EMI and pay later, helping you reduce cart abandonment and increase conversion rate without managing multiple integrations.
Step 2: Show instalment options early. Do not wait until the payment page. Display messaging on product pages, for example: “Pay ₹1,500/month for 6 months. No cost EMI available.” Shoppers who know upfront that instalment payments are available are less likely to abandon their cart before even reaching checkout.
Step 3: Keep checkout simple. A good checkout payment gateway presents all payment options clearly and without extra steps. Every additional click between cart and confirmation is a drop-off risk. Keep the flow to three steps or fewer where possible. This directly improves checkout conversion rate.
Step 4: Optimise for mobile. Mobile devices account for over 68% of ecommerce sessions but carry the highest cart abandonment rates. Your BNPL option must work smoothly on small screens. Test the instalment selection flow on mobile and ensure it is fast and easy to tap through.
Step 5: Track and refine. After enabling BNPL, monitor changes in your checkout conversion rate, average order value, and abandonment rate. Use that data to adjust where and how you display the option — and to identify any remaining friction in the payment flow.
Conclusion
Businesses lose significant revenue to cart abandonment, but much of it can be prevented. Buy Now, Pay Later (BNPL) helps remove the affordability barrier at checkout, making it easier for customers to complete their purchases. It improves conversion rates, increases average order value, and attracts shoppers who might otherwise walk away. When combined with a reliable payment gateway like PayU, your checkout stops being a point of hesitation and becomes a moment where more customers confidently say yes.
Frequently Asked Questions (FAQs)
1. What is BNPL and how does it work?
Buy Now Pay Later (BNPL) is a payment method where shoppers buy immediately and pay in instalments over time. The merchant receives the full amount upfront via the payment gateway; the customer repays in scheduled parts.
2. How does BNPL reduce cart abandonment?
It removes one of the most common reasons shoppers leave without making any purchase – the affordability barrier. Instalment payments make high-value purchases feel manageable, directly improving checkout completion
3. Does BNPL increase average order value?
Yes. When the upfront cost feels lower, shoppers spend more per order. Higher-order values and better checkout conversion typically follow BNPL adoption.
4. Is BNPL suitable for all product categories?
It works best for higher-priced categories such as electronics, appliances, furniture, and fashion. For lower-value items, the impact is smaller, though it still builds buyer confidence.
5. Do I need a separate integration to offer BNPL?
Not necessarily. A well-rounded online payment gateway like PayU includes EMI and pay later options within its payment processing suite and no separate tools are required.
6. Is BNPL safe for merchants?
Yes. The merchant receives the full payment upfront through the payment gateway. Repayment risk is managed by the BNPL provider, not the business.
7. How does BNPL affect checkout conversion rate?
Stores offering instalment payments report a 2.1% lift in conversion rates and up to 10% less cart abandonment.
8. Does BNPL work for first-time customers?
Yes. First-time buyers hesitate to spend large amounts with unfamiliar brands. A purchase now pay later option lowers that risk and makes the first transaction easier to commit to.
9. Where should BNPL be displayed on a website?
On product pages — not just at checkout. Showing the instalment cost alongside the full price early is one of the most effective ways to improve checkout experience for price-sensitive shoppers.
10. What should I look for in a payment gateway to support BNPL?
Choose a payment gateway for ecommerce site that natively supports multiple payment methods and integrates cleanly with your platform. PayU covers both — making flexible payment easy to offer at scale.
