Why Fashion brands should see ‘BNPL’ as a key driver for growth

Hesitant to add BNPL to your checkout? Think again.

In the world of payments, there is no faster growing payment method than Buy Now, Pay Later (BNPL) services: consumers’ demands for flexible ways to shop and pay online are bigger than ever. And brands can leverage consumers’ increasing demands for BNPL services for growth: offering flexible payment options will delight customers and boost business. In fact, it’s essential to get on the BNPL-train rather sooner than later: 30% of European e-commerce spend is expected to be made through BNPL payment methods in 2025 – a whopping 92% increase compared to 2019.

This is why consumers love ‘Shop now, pay later’

Research shows that 48% of Dutch and 53% of German consumers have a ‘pay after delivery’ need. Being able to see, try and feel products before buying is most important, followed by the need for a simple return process and the need for flexible payments. Essentially, BNPL services add trust, security and ease to the online shopping experience: shopping - and then paying - online becomes as easy as 1,2,3. At the same time, BNPL services lift barriers for consumers and enable them to shop and experience, now. For consumers, BNPL services bring the infinite world of things to see, try and experience a little closer to home. Especially Millennials and Gen-Z are attracted to this new way of ‘experiential’ shopping: easy, fast and best of all, without sky-high transaction costs or interest rates.

Benefits of BNPL for brands

Consumer demand for BNPL services is huge and shows no signs of slowing down: offering it to customers can help businesses increase conversion rates, basket size and build customer loyalty. But it will not only increase conversion rates among existing customers – offering BNPL in your checkout will also attract new consumers. In that regard, BNPL is as much a marketing tool as a payment method.

"The availability of post-payment services guarantees trust and control," says Alexander Scheibel, Director of Product at AfterPay. "It ensures that consumers feel an additional level of security when shopping with our brands. Flexible ways to pay make shopping easier and more accessible”. In this light, it comes as no surprise that over six million Dutch consumers already use AfterPay - that is about half of the Dutch e-commerce shopping population.

Scheibel continues: “Another benefit for brands is that we take over the entire financial collection process, from the first invoice to dunning and debt collection, a unique service offering in our industry. This way we can facilitate a brand’s own experience throughout the entire customer journey. And at AfterPay, we take the financial risk. Our brands always receive their payout.”

Research at AfterPay Insights, AfterPay’s consumer research platform, also shows that not being able to see, try and feel products before buying is a key barrier to increase online purchases for 47% consumers who are normally loyal to offline channels. By offering BNPL services, brands can lift that barrier and entice ‘Offline Loyal Shoppers’ to shift purchases from brick-and-mortar-stores to online channels.

But what about returns?

A common assumption is that offering BNPL services will also increase a brand’s return rate. But research at AfterPay shows this not to be the case. While consumers do indeed return more – because they order varied sizes for example – they also buy more different items. This results in a higher basket value - even after returns are settled.

The moment is now: jump on the BNPL-train BNPL is estimated to grow +92% by 2025. We even expect BNPL to become so popular that brick-and-mortar stores will offer this payment option soon. Now really is the moment to jump on the thunderous BNPL train.

Get on board! Find more information on how AfterPay can help you boost and grow your business here.

About AfterPay

AfterPay enables consumers to shop now, pay later: a fast, easy and safe way of paying. AfterPay offers five different payment options: the 14-day invoice, the campaign invoice, the consolidated invoice, fixed installments and AfterPay FLEX. These services are available at the largest global and local brands in nine countries: The Netherlands, Belgium, Germany, Austria, Switzerland, Sweden, Norway, Finland and Denmark. AfterPay is a business unit within Arvato Financial Solutions and Bertelsmann.