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Retail Insights


Ever since it came onto the scene, buy now, pay later (BNPL) has been reshaping the retail landscape. The service—which allows customers to split the cost of their purchases into multiple installments—has not only changed how people pay, but how much they buy, how often, and where.

Consumers aren’t the only ones enjoying the benefits of BNPL. Retailers are reaping the rewards, too. BNPL delivers significant gains to U.S. merchants on all the key performance metrics they care about, from customer acquisition to sales. 

The undeniable ROI of BNPL, combined with growing awareness, has helped accelerate its acceptance in the U.S. retail market. But BNPL’s increasing market share is just the beginning: read on for the top BNPL trends of 2021.

  1. One in four U.S. merchants already accept BNPL.

BNPL isn’t a fleeting trend. 25% of U.S. merchants already accept BNPL, according to our recent survey of 1,051 U.S. merchants conducted in collaboration with RFi Group. Of those who don’t, 46% say they are either likely or extremely likely to accept it within the next year. 

If you’re among the growing percentage of ecommerce retailers who offer BNPL as an integrated option to customers at checkout, you likely already know how it works for online purchases. But the merchants we surveyed were less likely to be aware of the in-store offering, which is becoming equally vital as consumers make their post-pandemic return to in-person shopping.

  1. Many merchants jumped on the BNPL trend early.

Among merchants who accept BNPL, about half have done so for at least one year, with 20% accepting BNPL for two years or more. 

Of course, that means that the remaining 51% of merchants have just signed up for the service in the last year! While first mover advantage is key, it’s clear that the momentum has continued as BNPL becomes ubiquitous across the retail landscape.

  1. BNPL is loved by merchants big and small.

Larger merchants are more likely to accept BNPL (but only slightly): 33% of merchants reporting revenues of $25 million or higher accept BNPL, compared with 25% of merchants overall. 

BNPL acceptance

But BNPL isn’t just for industry titans: among businesses that are three years or younger, 37% currently accept BNPL. That number jumps to 46% for those in the 3-5 year range. At Zip, we see the diversity of BNPL merchants firsthand, from our enterprise partners to the thousands of small- and medium-sized businesses that offer our pay later solution at checkout.

  1. Increased sales, convenience, and AOV remain top reasons merchants use BNPL. 

The #1 reason merchants choose to offer BNPL is to increase sales, with 54% of merchants citing this as their top motivating factor. The next most common reasons are to provide an easy and convenient way for customers to pay, and to increase average order values. The full range of benefits can be found in the graph below!

BNPL acceptance graph

  1. BNPL is a competitive differentiator.

27% of merchants report they initially began offering BNPL as a way to compete with other businesses that were already offering this payment method. Today, virtually every major retailer and many smaller players offer this payment option to their customers. Not doing so means missing out on a crucial opportunity to drive repeat purchases, customer loyalty, and engagement.

  1. BNPL drives big wins for merchants.

What are the benefits of accepting BNPL? Here’s a major one: 55% of merchants say BNPL offers a better experience for their customers. Accepting BNPL also drives strong business results, with 50% of merchants reporting an increase in overall sales, and 38% reporting higher AOVs.

BNPL primary benefits

In fact, 91% of merchants report improvements in at least one key business metric after accepting BNPL, whether that’s revenue, AOV, conversions, or new customers.

These are not minor improvements, either. After implementing BNPL, retailers see an average of:

  • 16% increase in cart totals
  • 15% increase in conversions
  • 14% lift in revenue
  • 13% increase in new customers
  • 13% lift in repeat purchases

What Can BNPL Do for Your Business?

It’s time to find out. BNPL is good for customers, and it’s good for you. On average, Zip merchants enjoy a 20% increase in topline sales, 60% increase in AOV, and 80% increase in repeat customer rate. Plus, it only takes 10 minutes to get set up. Get started here.


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