BNPL (Buy Now, Pay Later)
Definition
A checkout option like Affirm, Klarna, Afterpay or Shop Pay Installments that lets customers split a purchase into payments. You are paid upfront, minus a fee that is usually higher than a card fee.
Want a deeper explanation?
BNPL often raises conversion and average order value, especially on higher-priced items. The provider takes on the credit risk, so you get paid in full even if the customer misses payments.
The cost is in the fee, so it belongs in your payment-processing costs when measuring contribution margin. Watch for: BNPL payouts booked as net deposits, which hides a fee that can be two to three times your card rate.
Example
A $300 order paid with BNPL nets you $282 after a 6% fee, versus about $291 on a standard card.