Elena Beliaeva-Baran
min read
Last Update:
October 3, 2023

What is BNPL?

BNPL (Buy Now Pay Later) has quickly become one of the leading financial business models.

It is a flexible and convenient payment option and has emerged as a popular alternative to traditional credit. 

It offers consumers to make purchases and split payments into installments over several weeks or months. Usually offered by a 3rd party providers, such financial options are often integrated into e-commerce websites, mobile apps, and POS (point-of-sale) systems. 

This article will cover responsible BNPL as a business model and how businesses can fully implement and leverage such payment options for long-term growth. 

Why is BNPL so popular?

Juniper Research estimated that in 2022, there were 360 million BNPL users worldwide. 

Predence Research predicts that by 2027, it is expected that there will be 900 million BNPL users - an increase of 157%. Regarding the estimated consumer spending using these services, it is predicted that the number will see a 290% increase (from 2022) and reach $437 billion globally.

BNPL is one of the many types of FinTech software:

  • Accounting & Finance
  • Asset Management
  • Business Lending & Finance
  • Capital Markets
  • Core Banking & Infrastructure
  • Credit Score & Analytics
  • Crypto
  • Digital Banking
  • Financial Services & Automation
  • General Lending & Marketplaces
  • Insurance
  • Mobile Wallets & Remittances
  • Payments Processing & Networks
  • Payroll & Benefits
  • Personal Finance
  • POS & Consumer Lending
  • Real Estate & Mortgage
  • Regulatory & Compliance
  • Retail Investing & Secondary Markets

Get answers to the most common questions about FinTech Software: 7 Answers To Most Common Questions About Fintech Software

Just like with other integrated FinTech, one of the reasons for such high growth today and in the foreseeable future is convenience. 

Another is - consumer psychology. 

BNPL services are often either interest-free or have a low-interest rate. 

This makes it easier for consumers to enjoy the benefits of their purchases immediately with the feeling of loss aversion. 

Spreading the cost of purchases over time reduces the perceived loss associated with making a large purchase all at once. 

With such an offer, the consumer decision-making process becomes significantly shorter and likely positive.

BNPL financing has gained so much interest because of the new alternative payment options it offers. 

Compared to traditional credit cards, BNPL solutions are unlimited, more straightforward, and not as costly. 

This split payment option also appeals to younger generations who are wary of debt and prefer flexible, transparent, digital payment options. 

Reasons for using a BNPL

Integrating such payment options provides e-commerce websites various benefits, including increased sales, higher conversion rates, reduced fraud, and chargebacks. 

Source: Statista, 2022

Why do we need Responsible BNPL?

Though the BNPL model offers many benefits for customers, it is also facing a fair deal of criticism. 

BNPL financial option can be used irresponsibly by both the consumer and provider.

One of the causes is promoting unhealthy consumer behavior by encouraging debt accumulation. 

Often, BNPL providers encourage customers to use their financial services to cover everyday expenses and rely too heavily on credit instead of practicing healthy financial habits. 

Such a trend is also visible in this graph:

Product categories purchased by consumers using BNPL in 2021
Source: Finder

PYMNTS analyzed the BNPL consumer spending patterns in 2021 and identified the product types most often bought through the service.

The graph shows that the top 15 product categories purchased most often by consumers in 2021 are primarily everyday things and necessities. 

The BNPL industry is relatively new and is subject to a different level of regulation than other forms of credit, possibly leading to inconsistent practices across providers. 

As a result, consumers might be practicing constant overspending and unhealthy financial habits, visible here:


 BNPL consumer spending patterns in 2021
Source: Statista, 2022

To resolve this issue, larger transparency about the fees, terms, and conditions is an absolute must. 

Another "must " is - a more extensive implementation of responsible lending practices and fostering financial well-being communication. 

This will help a BNPL provider or a partner to build a solid, socially responsible brand and, as a result, long-term success.

What Is Responsible BNPL?

The main difference between BNPL and Responsible BNPL is how the service is used. 

The fundamental principles of responsible BNPL include budgeting, transparency, and payment flexibility. 

Budgeting with BNPL means consumers should only use these services for purchases they can afford to repay within the specified payment period. This can help consumers avoid overspending. 

Transparency in BNPL means that providers should be upfront about their fees, terms and conditions and provide clear and easily accessible information to consumers. 

Payment flexibility, like the possibility of extended payment periods for larger purchases, can help consumers manage their cash flow more effectively.

By practicing responsible financial services, we believe consumers and providers can work together to create a more responsible financial future!

The Benefits of Implementing Responsible BNPL for Businesses

Responsible BNPL is a long-term strategy. Intensive and irresponsible BNPL can increase the profit of companies here and now. However, in the long term, it can have negative consequences for the entire segment as people start to get into debt on a larger scale than they should. 

Customer retention, brought by responsible BNPL, would create long-term benefits for years compared to a quick but short profit. 

To sum up, the benefits of implementing or building responsible BNPL can boost competitive advantage and create a strong brand reputation. 

When a customer is confident in the service, educated about the best practices for financial well-being, and is not expecting any surprises related to the service, the magic happens.

The Benefits of Implementing Responsible BNPL for Businesses


Whether you are interested in BNPL as a business model or looking for more information regarding the implementation of split payments in your business, it is crucial to understand the industry from all sides. 

Making informed decisions is crucial in business as it can directly impact the success and longevity of the company. 

If you're considering combining different payment options in your e-commerce or any other digital business, you might find these resources helpful: How to integrate cryptocurrency payments in an app?

Informed decisions based on thorough research, analysis, and understanding of market trends and consumer behavior, can help businesses identify growth opportunities, mitigate risks, and stay ahead of the competition in today's fast-paced business landscape. 

We aim to provide you with as much information as possible so you make data-driven and informed decisions when it comes to payment integration. 

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