Buy Now Pay Later App Development: The Ultimate Trailblazer in the Fintech Industry

Quick Overview: Understanding the concept of BNPL is important for businesses today. It is the modern payment method that appreciates the online shopping habits of customers. Even if you want to develop a Buy Now Pay Later App, this article serves you with everything. You will get to learn about the BNPL business model, features, income sources, benefits, and steps to build a BNPL application.  

Globally the number of online purchases is already at its peak and will constantly increase over the years. Somewhat new technology is the reason. Now, the payment options are quite wider than ever before.  Based on the Forbes survey, 49% of respondents said to utilize BNPL for average-price clothing, shoes, and accessory purchases. As a result, eCommerce retailers and stores understand the shoppers’ behavior. They have already collaborated with BNPL app solutions. It is a better way to make customers’ purchases easier and budget-friendly. 

Buy Now Pay Later (BNPL) is the trendsetter for payment solutions. It is a sort of buzzword in the fintech industry. In addition to that, it has captivated a vast audience. It has been observed that BNPL services operate as a marketing tactic. So, it invites customers to purchase products online or in person right away without actually paying. Alongside, it has extended the customers’ wish list beyond their budget. Some industries have introduced BNPL and seen a whopping revenue.

9 Prominent Sectors Utilizing the BNPL App Solutions 

• Consumer Electronics
• Supermarkets
• Fashion & Garment industry
• Healthcare sector
• Education 
• Media and Entertainment
• Tourism 
• Logistics
• Banking, Financial Services, and Insurance (BFSI)

Besides that, the reports of the Consumer Financial Protection Bureau (CFPB) portray that BNPL loans originated in the U.S. by five lenders grew by 970 percent, from 2019 to 2021. If you are planning to enter the BNPL market, now is the right time. BNPL is indeed a profitable and futuristic business solution. It will be a game-changer for the fintech sector. Hence, you can rule the upcoming eCommerce market with BNPL. 

In this article, you will get to learn about the BNPL app solution inside out. It covers all the steps and costs to develop a Buy Now Pay Later app. Scroll down to know more.

What is Buy Now Pay Later (BNPL) Model and How Does BNPL Work? 

Implying the name, Buy Now Pay Later (BNPL) is the cutting edge concept. It gives the privilege to customers to buy goods and services without immediately paying for them. It is a renowned short-term financing method. Basically, it allows you to pay for the service later on in equal installments. Therefore, BNPL is also recognized as a point-of-sale installment loan. 

BNPL has emerged and been introduced to offer convenience to customers. So, they can easily manage online or in-person purchases. The cherry on the cake is that it majorly provides you with interest-free payments.   

You can say that the Buy Now Pay Later app functions as a personal shopping guide. Because it shows consumers offer personalized shopping advice. Additionally, it assists you in shifting your wish list items to the shopping cart i.e., proceeding to the buying option.  

When it comes to connecting BNPL services, it can be incorporated directly into an e-commerce platform. The integration process is quite short and limited to a two-click procedure. As a result, businesses can witness an average increase in conversion rate after deploying a BNPL app. So, BNPL will show an increasing trend in both online shopping and business revenue. 

Some of the well-known BNPL providers such as Klarna, Affirm, or Afterpay allow customers to stretch the cost. You can also transfer funds immediately to the shop. However, it undertakes the credit risk for both the consumers and the vendors. 

BNPL App Development: An Impactful Solution in the Growth of Multiple Industries

The significance of BNPL app development has been enhanced due to the economic problems linked with the pandemic. After COVID-19, consumers are more inclined to look for such versatile financing choices. Aside from that, the Buy Now, Pay Later (BNPL) mobile application permits customers to purchase things immediately. That too settling the payment for them afterward during a predetermined time. It benefits customers as the simple method to acquire loans for a short period. 

The BNPL notion is being favorably embraced by the market. Buy Now, Pay Later apps are changing the sphere of the eCommerce and banking sector.  With the development of the Buy Now Pay Later app solution e-commerce sales enhanced considerably. The online shopping of customers has accelerated as it breaks payments into interest-free installments. In a nutshell, it has transformed the way shoppers get credit. 

However, it gives simplified and rapid solutions to get loans and make purchases without any hassle. The customer retention rate has remarkably increased due to the easy BNPL option. So, online stores like shopping, education, healthcare, etc., have integrated BNPL solutions. It can capture global customers and boost their engagement.  

Leading-edge BNPL App Solutions of all time 

• Klarna

Klarna is the supreme and best-in-class BNPL solution established in the USA. It is prevalent for offering different repayment options. Klarna has a competitive edge in the sector. It stays ahead by allowing consumers to pay back for up to 36 months. 

Additionally, Klarna provides several payment alternatives, including a pay-in-four plan (interest-free) and monthly finance (0% to 29.99% APR) choices. But Klarna charges a late fee of up to $7 for every payment that exceeds 10 days after the due date. Big retailers such as Etsy and Sephora utilize the BNPL services of Klarna.  

The Klarna has marked its reach in 17 countries and works with over 250,000 retailers. With support for the norm of cardless transactions, Klarna offers a virtual one-time card. It can also be used to make in-store payments that are not associated with the platform. 

• Affirm

Another popular BNPL application is Affirm. It is headquartered in San Francisco, California. Today, across 12 million customers utilizing Affirm globally. It allows consumers to borrow up to $17,500 and pay it back over time at interest rates ranging from 0% to 30% (based on the vendor). Affirm has 12,000 retail locations.

Retailers like Amazon and Walmart are affiliated with Affirm as their payment option. Due to its no late repayment charges, it entices shoppers for BNPL. However, missed repayments can affect the future loan requirement. 

Furthermore, Affirm gives flexibility in most of the loans. It can be repaid in three, six, or twelve months without penalty. It verifies the past payment history to approve any loan. So, customers can also use BNPL at any store that is not partnered with the firm. 

• Afterpay

It is an Australian BNPL financial company Afterpay was founded in 2014. Afterapy currently has around 20 million users. With gaining wider acceptance, it has also been doing business in New Zealand, the US, the UK, and Canada. Similar to Klarna, After Pay also offers pay-in-four and monthly plans to users. Old Navy, Nordstrom, and Gap are among the renowned retailers partnered with Afterpay. However, the total list of 144,000 retailers is associated with Afterpay. 

One can easily browse and shop online or in person with the BNPL services of Afterpay. However, the charges are nil in the pay-in-four plan. While the monthly plan incorporates 0% to 35.99% APR. You have to bear up to $8 as the delay penalty. It applies to your payment due after 10 days of the actual submission date.

• PayPal

PayPal was established in 1998 and is one of the senior US-based financial companies. It offers a flexible Buy Now Pay Later app solution. PayPal is affiliated with millions of vendors and doesn’t have any charges for late payments. You can make payment options i.e., pay-in-four and monthly options. It conducts soft credit checks of the users for the pay-in-four option. Although the monthly plan has interest range from 9.99% to 29.99% APR. 

Do you know? PayPal was not originally initiated as a BNPL solution. It has been built as an effective mode to send and receive money online. Later on, it was backed with digital wallets and so on. Now, it has stood among the faster and more secure online payment applications. Many famous businesses such as Target and Home Depot utilize it. 

How to Choose the Ideal Business Model for a BNPL Solution? 

Building a robust BNPL app is not at all a cakewalk task. You need to undergo many back-and-forths at every stage. Finalizing the right BNPL business model among various forms is also one of the critical factors. It will affect the revenue sources and your BNPL app’s overall performance. 

Usually, BNPL follows two types of business models. These determine its revenue sources and integration in the retailer’s payment gateways. 

• Affiliate Marketing Business Model

The affiliate marketing business model is the proven model. It is utilized by Afterpay. It allows businesses to make money through affiliate commissions. If you select the affiliate model, your BNPL solution can collaborate with retailers online and in physical stores. Moreover, it works as a contract between the supplier/retailer and the BNPL provider.

Being the BNPL service provider, you will get the earnings in the following form;

• Commissions on the percentage of sales
• Offer coupons or deals
• Promotes your services
• Partnership brokerage 

So, your Buy Now Pay Later app development solution with an affiliate model can be partnered with any retailer. You can also increase the scope of revenue generation. 

• Interest-based Business Model

The interest-based model defines the type of BNPL app development. Such a business model of a BNPL solution works to generate revenue primarily in the form of interest. It charges users on lending loans or credit amounts on purchases. However, it mainly operates as a digital wallet to make payments for purchases online or in person. So, users are liable to pay in the below-mentioned ways;

• Interest 
• Late payment charges
• Transaction fees 

Normally, BNPL with a pay-in-four option doesn’t charge interest. But monthly payments have varied options i.e., 6, 9, or 12 months. So, it incurs interest rates based on the amount and duration. You can select an interest-based model to earn through each transaction of the customers. 

Although these models are influenced by revenue sources. Still for your clarity here’s how you can make money from your BNPL app. 

How Does the Buy Now Pay Later (BNPL) App Generate Income Sources?

Whichever BNPL business model you choose, it should benefit you with estimated monetary sources. BNPL app solution has the potential to turn out as a great revenue-generating business with skyrocketed market growth. Some of the ways of making money from the BNPL app are as follows;

• Membership fees: Customers can subscribe and become their BNPL service users. They can leverage with extra rewards and flexibility. However, it allows you to gain a loyal customer base and increases your profitability rate.

• Deferred repayments: When customers didn’t pay the amount within the given period. Your BNPL can generate a good amount through the customer’s late fees of deferred payments.

• Convenience charges: Usually, vendors are charged to pay fees for connecting and utilizing your BNPL platform. It covers the cost of service and makes you earn a better profit margin.

• Advertisements: Displaying ads on your BNPL mobile app or website can be considered for generating revenue. It increases its brand visibility through sponsored ads and monetizes your BNPL app. 

Moreover, so far you must have got the insight that BNPL is a profit-making business. It has the potential to attain sales targets. However, many are still confused about BNPL app solutions and credit cards. Let’s elaborate on the major difference between them.

Credit Card Vs. BNPL: They are not the same thing! 

• Credit cards usually have many hidden charges. On the other hand, BNPL doesn’t have any extra fees and maintains transparency. 

• It’s difficult to get loans approved for credit cards. Whereas, BNPL approves loans for short-term instantly.

• Credit cards perform hard and in-depth credit checks of users. While BNPL works out with soft credit inquiry.

• You need to have a good credit score to obtain loans. But that’s not the case with BNPL. It’s not compulsory to have a good credit score in BNPL. 

Befitting Benefits of Buy Now Pay Later App Development 

The BNPL app gains expertise in targeting a huge audience and attaining goals efficiently. For planning to set up the BNPL app, here are the reaping benefits.

• Expand Customer Base

Today, online shopping is the latest and sort of everlasting trend. It encourages people to buy online. To match the bar, you need to be an online entity in the form of a BNPL mobile application. It allows them to securely make purchases online with your service. So, even if you already have a BNPL business, digital transformation will definitely bring enhanced ROI. 

• Optimizes Customer Experience

BNPL offers online payment as a streamlined method. It enables your customers to speedily and easily get loans. BNPL also performs soft credit checks. So, it determines the credit limit of each customer. Hence, developing your BNPL app solution offers a personalized customer experience.   

• Extended Sales Target

With the cutting-edge BNPL app, you can exceed the sales target and entice more users to utilize your service. It gives various payment options. BNPL allows them to extend online purchases. Hence, it boosts users’ engagement and makes your app reach sales goals efficiently. 

Read More: How to Create Mobile Banking App

What are the Required Features Set to Develop a Buy Now Pay Later App? 

For building a top-notch BNPL app, it is important to have clarity of your app’s purpose. It can be defined as the feature requirement. You need to consider the features set for 3 different panels. Have a look at the features to make your BNPL application. 

• User Panel Features 

The user panel features leverage the users for a better experience on your BNPL app. Let’s dive into the features to deliver a user-friendly app. 

1) Quick Login: Customers or new visitors can easily log in or create them within a few seconds. Building a BNPL with a lower load time and quickly finishing the signup process gains users’ trust swiftly. 

2) User Dashboard: The interactive dashboard of the app permits users to simply access functionalities such as payment details, account settings, etc. So, the easy-to-use interface is the key element for building a user-centric dashboard. 

3) Multiple payment options: Allowing your users to settle with various payment methods is an amazing option. It builds their loyalty towards your BNPL services. 

4) Push notifications: Push notification is a vital marketing feature. It keeps users updated about new product launches, promotions, deals, etc. Hence, it keeps them connected with your business and increases your app’s visibility.

• Retail Panel Features

Now, the retailer’s panel of the app should consist of features. It will work according to the users’ required details to provide a personalized experience on the app. So, these features the retail panel shouldn’t miss out on.

1) User Accounts: Retailers can oversee the user onboard and ensure their navigation on the app. It makes customers sign in and handle the payments efficiently.

2) Transaction Security: Transactions on the app need to be end-to-end encrypted and offer secure payment gateways. It should be integrated into an app to keep financial transactions protected safely.   

3) Credit check: Checking the credit score and transactions are mandatory features in your BNPL app. It should verify the credit details of users on a real-time basis.

4) Data Analytics: The app merchant should access a dashboard to evaluate the data. It derives teh analytics on customers’ behavior, market campaigns, transaction history, and other important aspects.

5) Fraud detection: Your BNPL app should encompass a fraud detection and prevention tool. It keeps customers and retailers aware of potential risk factors. However, it prevents malware activities on the app and protects users’ data. 

• Admin Panel Features.

The admin panel of the BNPL application allows you to control the backend specifications. It makes changes to improve the performance of your app. Here are the features that the BNPL admin panel needs to have;

1) Account Management: The admin panel has all the rights to manage and modify the accounts of app users. You can oversee the profiles and payment history. 

2) Financial Reports: The admin panel allows you to manage the app. It auto-generates reports of the users’ transactions. So, it gives detailed insight into bad debts, receipts, and payments.

3) In-App Customer Support: The customer support help desk is a constant feature in every Fintech app. Offering 24/7 support to the users increases your app’s credibility. 

4) Checkout Integration: Integrating a streamlined checkout solution, makes your app provide a seamless payment experience. Additionally, the admin panel can integrate other payment gateways. So, it undertakes security compliance to enhance functionality. 

How to Develop a Buy Now Pay Later App from Scratch? 

For your Buy Now Pay Later (BNPL) app development, you need to undertake a range of steps strategically. Starting from scratch, BNPL demands to have good data on the market scenarios and upcoming fintech trends. So, here are the steps you should perform to create the BNPL app.

• Determine Your Application Needs

Firstly, you should start with understanding and analyzing the fintech market. It is extremely crucial to plan your app needs prior to defining further goals. Also, look for experienced mobile app development to get your BNPL app ready based on the decided requirements. Basically, it makes a roadmap to include and set up other functionalities in your app. 

• Design & Development

After getting the right fintech app development company, your actual app building should be started. It incorporates you to meet the following solutions; 

• UI/UX design
• Backend development
• Frontend development
• Adding features
• Database setup 
• Structuring Framework  

All these requirements need to be performed thoroughly to get the desired final outcome. You can hire dedicated developers for this stage. It makes your app development process cost-saving. They charge on an hourly basis. So as per the estimated hours of development, you can make a deal at your budget. 

• Establish a Payment Gateway

Now, you should ensure to finalize payment gateways for your application. Offering a range of payment alternatives is a great choice. Because it increases the convenience of the customers. However, setting up an account with payment gateways makes you integrate options. Thus, it simplifies payment flow. 

• Setup Security & Compliance

This step is required to keep a closer eye on the making, as security measures need to be fixed as needed. Implementing SSL encryption, two-step verification, and data protection solutions gives a secure environment to the users. Remember to consider the security and compliance regulations of the authorized platform. It will protect the app from any cyber attack. 

• Testing & Deployment

The last but most important step is to test and ensure the application for launched in the market. If any of the above steps have an issue or error, a testing stage can easily find it. So, developers can rectify and debug the errors. Extensive testing and quality process free the application from any bug and troubleshoots risk factors. 

Moving further, after performing all the tests and getting the green signal, the deployment process should be initiated. The BNPL app launches on the respective stores and is accessible to the users. However, you can also add the marketing step. You plan campaigns to get customers’ attention for the app. 

With that, the steps are the right ways to build a BNPL mobile application. It requires your proper attention to build a competitive app. Hence, you can successfully offer an exceptional user experience. 

Quick Tip: The process of BNPL app development can become effortless if you hire mobile app developers. Experts with good experience and industry knowledge build top-notch BNPL solutions. Outsourcing app developers from India is a budget-friendly option for the same. 

Trusted Technology Stack for Building Powerful Buy Now Pay Later App Solution

The technology stack for any app development either makes or breaks your business. It is necessary to scrutinize the technology requirement. You need to look for a tech stack to build feature-rich applications. Furthermore, BNPL app development can be developed from the right one among the three categories given below. 

1) Native BNPL App Solution

• Android BNPL App Development

Developing the Android BNPL app emphasizes leveraging the advantages of Java or Kotlin programming languages. You can implement Android Studio. It is backed with Android UI tools for the interactive user interface. 

Additionally, for payment integrations, you have options such as Stripe, PayPal, and GPay. Besides that, Android app developers have bagged a good amount of work experience. It will assist you in delivering top-notch BNPL apps. 

• iOS BNPL App Development

When it comes to selecting iOS, you can make the best application with Objective-C and Swift languages. These are the result-oriented solutions. It develops an efficient BNPL app. Aside from that, utilizing iOS toolkits like iOS SDK ensures the responsiveness of the app. The payment gateways can range from Apple Pay, PayPal, etc. However, hiring an experienced iOS developer is the precondition for building a competitive app. 

2) Cross-Platform BNPL App Solution

• Flutter BNPL App Development

Now, developing your BNPL app solution for both Android and iOS is crucial. However, you can launch a cross-platform application in the market. Choosing the Flutter framework can meet your requirements accurately. Flutter assists in making applications for both iOS and Android. It is developed by Google, so you can go with the Dart programming language. Moreover, Flutter utilizes Google’s services for APIs and payment integrations. 

Whether you already have an iOS or Android app, converting the app into Flutter is also a good decision. So, Flutter will boost your app’s performance by 2x times. 

What Would be the Estimated Cost to Develop a BNPL Application? 

With the above-mentioned list of essentials, you might have a clue about the budget. The Buy Now Pay Later app development cost requires you to plan well in advance. Building your BNPL app from scratch makes you consider a range of factors. Let’s have a look at major things to look for in the app development budget. 

• Complexity of features
• Appropriate operating system (web, Android, iOS, or more)
• UI/UX design needs
• Essential Integrations
• Region of outsourcing developers
• The time frame of the project
• Hourly rate of the development team, etc. 

Alongside this, you need to build an MVP app for a successful BNPL application. So, the estimated cost to develop a BNPL solution would range between $20,000 to $100,000. It can be extended with add-ons, more features, and advanced integrations. Remember to evaluate each aspect thoroughly and cost-effectively develop your desired app.    

Tips to Find & Partner with the Right BNPL App Development Company 

Whether you want to hire a dedicated development team or company. You need to examine their capabilities from the following tips to undertake the development process. 

• Overall work experience
• Industry-specific knowledge
• Cost of app development
• Flexible approach to the project
• Problem-solving strategies 
• Faster turnaround time

By having your requirements listed properly, you can find the best efficiently. Make your project deal as per your expected skill set and price. Well, Rlogical Techsoft can be the ideal solution for your BNPL app. Our experts study the project needs and wireframe them accordingly. We keep customers aligned and informed about the process. We maintain transparency to know customer views. All-in-all Rlogical Techsoft has the exact solution to your BNPL challenge.

Final Thoughts 

In summing up, the whole concept and idea of BNPL app development is elaborated extensively. With the right choices, you can make the process hassle-free and time-saving. The future of BNPL will definitely flourish and influence various industries. So, the decision to have your BNPL app solution will turn out to be worthwhile. Despite being the short-term finance solution, BNPL will be proven lucrative for long-term business goals. 

So, what else would you need? Hire mobile app developers or teams and get started to make your BNPL stand among the list of apps like Klarna and Affirm. Connect with our expert for discussion!  

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