As buy now, pay later (BNPL) solutions grow more popular with the U.S. consumer base, a new partnership between Afterpay and Stripe will aim to expand the reach of installment payments even further. Under the new integration, Stripe merchants will be able to offer Afterpay’s payment service within their online stores.
“Stripe’s implementation of Afterpay comes as the demand for BNPL continues to grow rapidly across the world,” said Ben Pressley, SVP of global sales strategy and operations at Afterpay. “Stripe serves millions of businesses worldwide, with hundreds of thousands added in the last year, many of which are demonstrating a strong demand for flexible payment options.”
When a consumer opts to pay with Afterpay or an alternative BNPL service, they are able to pay only a fraction of the total sum upfront and yet still receive their goods immediately. The remaining sum will be paid out in a series of interest-free installments, allowing shoppers to budget for their purchases without using traditional credit services like credit cards.
Data shows that when retailers offer one of these installment payment options, consumers are more likely to spend more and increase their basket size; this ultimately results in higher conversion rates for the merchant. They also assume no risk for those future installments as the provider, such as Afterpay, pays the full amount at checkout and is responsible for collecting the future payments. Under the new arrangement, Stripe users can start accepting Afterpay almost instantly, with no application or onboarding needed.
“Flexible payments and budgeting is and will continue to be the way young people want to pay for things in their lives, and more and more retailers across industries are catching onto the benefits,” said Pressley.
The new partnership between Afterpay and Stripe will also be leveraged for entire e-commerce platforms, not just individual merchants. Squarespace will be the first platform to utilize this service and offer Afterpay installment payments to its customers. Those who choose to enable Afterpay on their sites will be able to build a fully integrated checkout experience, while retaining the look and user interface of their brand.
“Stripe and Squarespace have both noted that BNPL is a top requested feature by their merchants, as they aim to attract new customers and deliver higher conversion and average order values,” said Pressley. “With such demand, we expect Afterpay and BNPL more broadly to increasingly become the standard when it comes to online payment options for consumers.”