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Retail Insights


A decade ago, when online shopping was still in its infancy, the ecommerce checkout experience was largely limited to traditional credit and debit. Now, it’s surprising when a retailer — online or in-store — doesn’t accept a variety of payment options, including major credit cards along with Apple Pay, Google Pay, and Samsung Pay. Buy now, pay later (BNPL) is a newer option that’s quickly gaining steam as millennials’ payment method of choice. 

As the U.S. BNPL landscape matures, we predict that it will soon become the norm for ecommerce retailers to offer consumers not just multiple payment options, but multiple BNPL providers at checkout.

If you’ve already partnered with a buy now, pay later provider, you may be reluctant to expand your checkout offerings. But as many retailers have discovered, offering multiple pay later options to consumers comes with a host of benefits that we’ll explore below.

An Australian Trend Towards Multiple BNPL Providers

Because of the relative maturity of the Australian buy now, pay later market, trends that have taken place there provide valuable insight for American retailers. According to internal research, 60% of Australian merchants who accepted BNPL in 2020 accepted more than one BNPL service (an increase from 57% in 2019). This phenomenon of offering multiple BNPL providers is known as “dual apping.”

The adoption of BNPL has accelerated in recent years across the Australian ecommerce sector, although some retailers have been quicker to join the trend than others. Clothing, footwear, accessories, and apparel retailers are the most likely to offer BNPL, with 62% offering one or more pay later options to customers. Not far behind are beauty and personal care brands, mixed retailers, and sporting goods companies. Between 45% to 48% of these retailers accept BNPL. 

Moreover, half of apparel retailers who provide the option to pay later offer more than one service to consumers. For beauty and personal care retailers, as well as houseware and furniture brands, that number is even higher — reaching nearly 70%. 

The Benefits of Buy Now, Pay Later for Retailers

Across nearly all industries, the trend is clear: a growing number of US merchants are offering buy now, pay later at checkout, and merchants who do so are more likely than not to offer multiple BNPL services. Why?

Up to 49% of merchants say they initially started accepting BNPL because it provided a “convenient/easy way for customers to pay.” The second most common reason for accepting BNPL: customer demand.

Merchants adopt BNPL because their customers expect it. But many merchants also recognize the benefits BNPL offers them:

  • 54% of merchants agree that BNPL can increase their businesses’ online sales.
  • 51% believe it provides a convenient way to pay for their customers.
  • 40% say BNPL increases their average order value (ie. basket size).

Among the merchants surveyed, 91% of those who offer BNPL reported positive changes to their businesses. Merchants were most likely to see an increase in revenue, online sales, conversion, and new customers. Additional benefits included access to new customer demographics, increases in average cart value, more repeat purchases, and higher profits.

For businesses offering more than one BNPL option to consumers at checkout, the reasons cited were much the same:

The Case for Multiple BNPL Providers

Merchants who use BNPL are convinced of the benefits, because they’ve seen the positive impact firsthand. 

By accepting multiple BNPL services, merchants can exceed customer expectations, build loyalty, and enjoy higher order values and fewer abandoned carts. Here are three reasons why you should consider expanding your BNPL repertoire.

1. The modern consumer expects flexible spending options.

Today’s consumers crave options, from the products they buy to the way they buy them. According to a 2020 trend report from American Express, half of consumers want multiple, flexible spending options. Among younger generations, the demand for flexible payment options is even higher: 66% of Millennials want flexible spending options, compared with 54% of Gen Xers and 40% of Boomers. 

Even more compelling, Millennials and Gen Zers—who are poised to become the dominant consumers in the next few years—are seven to eight times more likely to use BNPL than Boomers. And surveys indicate that consumers who use BNPL are more likely to use multiple providers. In the US, 7 in 10 BNPL users are considering opening another BNPL account in the future.

Retailers have a prime opportunity to cater to these shoppers early on and stand out in an increasingly competitive retail landscape. By giving shoppers a choice at checkout, merchants enable customers to make an informed payment decision and feel more confident about their purchase. 

2. Offering multiple BNPL options provides a better customer experience.

Customer experience has come a long way from its days as a corporate buzzword. Today, it’s a serious focus for many businesses, and for good reason: completely satisfied customers provide 2.6x more revenue than “somewhat satisfied” customers. Expanding from one BNPL provider to multiple can bridge that gap from somewhat to complete satisfaction for shoppers.  

According to a 2018 Point of Sale Survey sponsored by Citizens Bank, 76% of shoppers are more likely to make a purchase if a payment plan with a “simple and seamless POS experience is offered.”

Our internal research indicates that many consumers are seeking out and using multiple BNPL providers for a number of reasons, such as taking advantage of sign up incentives, favorable interest rates, and repayment schedules:

By integrating with multiple BNPL providers, merchants cast a wider net to satisfy more potential shoppers. Consumers who are familiar with the concept can opt for their preferred platform, while those new to BNPL are given the opportunity to explore the options available to them and make an informed decision.

3. BNPL promises higher conversion and fewer abandoned carts.

It’s simple: when shoppers can pay with their preferred platform, they’re more likely to complete a purchase. 30% of shoppers who use BNPL say they would have abandoned their purchase if they hadn’t had access to this financing option. 

What’s more, BNPL can bring larger purchases within reach for many customers, or simply help shoppers better align their everyday spending with their budgeting and financial goals. Nearly half (48%) of shoppers say BNPL increases their spending power, enabling them to spend up to 20% more than they could using a credit card alone. For 44% of shoppers, whether or not a merchant accepted BNPL largely determined how much they would spend during the holiday season. 

When It Comes to BNPL, One Isn’t Enough

Offering multiple BNPL providers expands this flexibility for the consumer. Merchants get paid upfront, while customers can spread their payments over a six-week period, harnessing the power of BNPL to do the work of credit without the high interest rates or steep fees. 

By offering multiple BNPL options, ecommerce merchants can attract new customers, increase conversion, and foster customer loyalty. For retailers looking to expand their offerings, Zip offers a seamless integration experience that can be completed in 10 minutes, no API required. 

Interested in learning more? Request a demo or connect with our team to discover the benefits of offering Zip to your customers.


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