Buy Now, Pay Later (BNPL) is an increasingly popular way for consumers to buy online and in stores. These point-of-sale loans are offered by many services such as Affirm, Afterpay and Klarna. According to one survey, an estimated 39% of consumers try to buy now and pay the service at least once later. As interest in this type of short-term loan grows, so does the number of retailers accepting it.
- Buying now and paying later is an increasingly popular short-term lending option for consumers and retailers.
- Many platforms offer these POS installment loans for purchase at participating retailers.
- Not all stores accept BNPL as a payment option, but many top retailers are starting to sign on.
- While BNPL funding is convenient, there are some caveats to keep in mind.
- If your favorite retailer isn’t using BNPL, consider using an in-store loan or credit card.
What does it mean to buy now and pay later?
Buy Now, Pay Later is a type of short-term loan that you can use to pay for purchases online or at participating retail stores. There are many platforms that offer these POS installment loans.
- agree with
- Zip (formerly Quadpay)
The idea of buying now and paying later is simple. Consumers can split their payments into four (or more) installments. Depending on the platform, these loans may be interest-free. In a sense, buying now and paying later is like a layaway, but there is one important difference. Consumers can receive their purchases immediately without having to wait for all installments to be completed.
Some credit card issuers and payment processors, such as American Express and PayPal, also offer installment plans to eligible customers.
6 Major Buy Now, Pay Later Services and Their Participating Retailers
More and more retailers are accepting these point-of-sale (POS) installment loans as a payment method. However, where you can buy and shop now, what you pay for later depends on the payment platform you are using. Here’s a comparison of where you can use each of the six major purchase and postpaid platforms.
You can use Affirm to pay at the following major retailers and other companies:
- Best buy
- Delta Vacation
- Expedia Hotels and Vacation Packages
- Nectar sleep
- Neiman Marcus
- Posh mark
- Pottery barn
- Saks Fifth Avenue
Afterpay works with a variety of retailers, including health and beauty, fitness, apparel and jewelry stores. Some of the top retailers that accept afterpay loans are:
- Bed bath & beyond
- Forever 21
- MAC cosmetics
- Peer 1
- Tory Burch
- Alta Beauty
- Urban Outfitters
Four, or Pay With Four, has partnered with many brands in the areas of men’s, women’s, beauty, apparel and accessories. Some of the retailers who accept Four purchases now and pay later are:
- 360 mindful
- Fetch eyewear
- Hungry apparel
With Klarna, you can buy now and pay later online or anywhere with the Klarna app. Below is a list of stores that accept Klarna.
- Bed bath & beyond
- Calvin Klein
- Guess Factory
- H & M
- Lulu Lemon
- Tommy Hilfiger
Sezzle partners with leading retailers of men’s, women’s, kids’ and beauty brands. Merchants who accept Sezzle as payment include:
- Arani nutrition
- Itzy Ritzy
- Jessica Simpson
- Lamp Plus
- Melt cosmetics
- Umbro Premier
- Wings + horns
Zip allows you to purchase at these retailers and other companies using POS installment loans.
- Famous footwear
- the goal
- TJ Maxx
- Alta Beauty
Buy Now, Pay Later vs. In-Store Loans
Purchasing now and paying later is not the only way to buy over time. Many stores offer their own in-store financing plans.
These are usually under the umbrella of a deferred interest loan agreement. With this type of payment plan, you can use your store’s credit card to make purchases and pay interest-free for a set period of time. At the end of the period, you will accrue interest that would have been accrued if you did not pay the full balance.
Buy now, but later pay loan plans usually allow you to spread your payments in 4-6 installments. Deferred interest rate loans may allow you to pay for 12 to 24 months or more. If you make a large purchase between the two and want to diversify your payments, deferred interest payments may make sense.
With POS installment loans, you may not pay any interest at the time of purchase. Deferred interest plans, on the other hand, can be expensive if you don’t pay the full balance before the end of the promotion period. You are responsible for paying interest on the entire starting balance, even if the balance is low.
Buy now, pay later vs. credit card
If the store does not accept your purchase now, consider paying later as a payment option and using a credit card instead. Many credit cards offer the benefit of buying now, but not plans to pay later.
For example, you may earn points, miles, or cashback when you shop online or in stores with your rewarded credit card. If you are using a 0% referral purchase APR offer, your credit card may also charge a zero interest rate. Also, if you can pay the full monthly balance, you will not earn any interest.
You also have to pay by credit card, as opposed to making 4-6 installments with a POS loan. However, if you are attracting attention every month, carrying your balance can be costly. Therefore, consider how long it will take to pay before making a purchase with either payment method.
If you’re planning a big purchase, compare the best rewarded credit cards to see what you can earn with points, miles, or cashback.
More retailers are starting to accept purchases now and will pay later as a payment option. However, before agreeing to any of these POS installment loans, please check the number of payments you need to pay, the amount of each payment, and whether you will accrue interest. Also, consider that buying now and paying the loan later can affect your credit. Delayed payments can compromise your credit score and outweigh the convenience of paying over time.