Buy Now, Pay Later – available solutions, providers, and business models

Previously, we explained what Buy Now, Pay Later is (or BNPL for short) – currently one of the hottest topics in the e-commerce industry. To learn more about BNPL and why it is gaining popularity at the moment, check out our previous article here. This article will present various deferred payment providers and discuss BNPL solutions on the market. We will also look at how the e-commerce and banking sectors implement BNPL in their daily activities. 

BNPL providers in Poland

According to the WorldPay report, the global share of this type of payment in e-commerce will continuously grow and, as a result, will reach 4.2% in 2024. In Europe, the number is even higher; the share already stands at 7.4%, and the Polish market has made a significant contribution to this outstanding result.

Popular clothing chains (e.g., H&M, Zalando, and Diverse), as well as electronics retailers (e.g., Media Markt, RTV Euro AGD), and sports stores (Decathlon) operating in Poland, encourage their customers to “buy now and pay later.” They use BNPL services designed by different providers. PayPo, Twisto, Przelewy24, Kup Teraz – Zapłać Później, Smartney Pay, and Klarna are among the most popular. 

Top European providers and their BNPL models in use

Depending on the provider, the BNPL model may differ. Most companies allow customers to pay in installments; however, their number and repayment timeline may vary. Providers can also impose credit limits and implement interest rates after the free repayment period is over (usually after 30 days).

Before choosing the best BNPL provider for your business, consider the following aspects:

  • The country you operate in and the provider’s regional availability
  • A solution that matches your type of business (large merchants will have different requirements than small e-shops)
  • Repayment terms (e.g., repayment period)
  • Minimum and maximum credit limits
  • Flexibility and a range of choices designed for customers
  • Implemented fraud prevention strategies
  • A company’s reputation

Below, we present some top BNPL providers operating in our region:

Twisto

The Prague-based startup began operating in 2013 and quickly gained popularity in the Czech Republic and Poland. It offers free and paid plans, both allowing payment deferral and repayment in installments. Online payments and account options are available. Registered users have 45 days to make a payment, unlike unregistered ones, who must finalize it within 30 days. The Twisto app allows customers paying for the premium plan to use Apple or Google Pay digital wallets and save transaction details, including photos of invoices.

Klarna

It’s a Swedish fintech company that took the European market by storm. You can use Klarna as a payment option or take advantage of the mobile app. The purchase can be paid off in 30 days or in four installments, interest-free. In Poland, Klarna has become a partner for more than 4,000 Polish online stores. They provide services for the Polish fashion industry, among others.

PayPo

It’s a Polish solution already adopted by 25.000 stores, including Empik, Sephora, Reserved, and CCC. Similarly to Klarna, it lets the customer make the repayment in up to 30 days. PayPo offers a purchase limit, which varies depending on the value of bought items and increases over time. For the most loyal users, the maximum current limit is 3000 PLN. 

Other solutions

Other globally renowned BNPL providers are, for example, Visa, Afterpay, Splitit, and Sezzle. Moreover, the companies offering financial services such as payment gateways (for example, PayPal) – are starting to offer BNPL services.

BNPL (not only electronic) commerce solutions

The development of BNPL solutions by e-commerce platforms is a phenomenon slowly gaining momentum. For example, Poland’s biggest e-commerce platform, Allegro, granted PLN 965 million worth of credit under Allegro Pay in Q1 of 2022 (a 440 percent increase year-over-year). Zalando is another company that did not sign a contract with a provider and decided to develop its own BNPL checkout option instead. Payments can be put off for up to 30 days on Zalando, and the repayment details are shown on the user’s profile.

Perhaps the biggest change is visible in the shift from online to offline. That means that the BNPL solutions are no longer used only for online purchases but also for in-store ones. A growing number of fintech enterprises are issuing cards that allow customers to finalize such operations. For example, Revolut introduced a Pay Later card, which can be used at any store accepting Revolut payments. 

An opportunity for the banking sector

An ever-growing BNPL market offers great potential for both online and offline commerce. Banking is another industry that should and is already taking advantage of this highly profitable solution. Initially, banks viewed BNPL providers as competitors, but now they more and more often see them as potential partners. Such collaborations allow the perceived “traditional” sector to stay relevant with its customers. 

For example, the European neobank Viva Wallet partnered with Klarna and added the Swedish company’s solution to the already available 30 payment options. In the United States, outsourcing “buy now, pay later” services to fintech is also gaining significant popularity. 

However, those banks that want to take advantage of the BNPL but opt out of the collaboration with popular third-party providers are increasingly looking into developing alternative solutions. That is the approach taken by Deutsche Bank in Germany and the PKO BP or Millennium Bank in Poland.

As you can see, the BNPL “industry” is not only evolving, but it’s also constantly differentiating. Various fintech companies compete by offering more complex and attractive solutions and services. In the months and years to come, we will observe a great deal of expansion and interesting inter-sectoral partnerships aiming to attract consumers.

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Katarzyna Królak-Wyszyńska
CEO
Katarzyna is an expert in discovering potential areas for development and turning them into effective businesses, products and services, primarily digital. She concentrates on user-oriented design and quick concept validation. She co-created and organized the Future Makers Challenge, a program connecting corporations with students. Co-creator of The Heart Warsaw. Co-author of the MIT EF accelerator program in Poland. She sits on the Jury of MIT Innovators Under 35 in Europe and South America. A Startups mentor.

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