When BNPL does and doesn't beat credit cards at checkout

• BNPL drives higher conversion and basket size in ecommerce, especially for mid-value purchases and younger or underbanked consumers.
• Credit cards remain dominant due to universal acceptance, stronger protections, and suitability for long-term or variable spend.
• The gap between BNPL and cards is narrowing as both adopt features from each other, leading to convergence at checkout.
• Supporting BNPL across channels introduces fragmentation, making orchestration critical to manage providers, routing, and integrations efficiently.

Don't have time to read more now? Sign up to our newsletter to get the latest insights directly in your inbox.

Buy now, pay later (BNPL) isn’t a niche checkout option anymore. Globally, online BNPL spending reached around $342 billion in 2024, up from under $2 billion a decade ago. What began as an alternative to card payments is now embedded across ecommerce, mobile, and an increasing number of in-store journeys.

The buy now pay later fintech sector has expanded rapidly in recent years, with players like Klarna, Affirm, Afterpay and a fast-growing set of regional BNPL fintech providers embedded into checkout flows.

Merchants and ISVs are now facing a more practical question: Is BNPL changing the structure of payments at checkout, or is it actively competing with credit cards for the same consumer spend? 

The honest answer? Both, depending on the context around the customer and how they’re paying.

The smart approach is to see BNPL and cards not as rivals, but as complementary options within the same checkout ecosystem. Merchants who understand where each performs best are the same ones able to use that insight to orchestrate flows that improve performance across every channel.

BNPL allows consumers to split a purchase into a fixed number of installments (typically three or four, paid over six to eight weeks) usually with no interest if payments are made on time. 

Approval is fast, typically completing at checkout in seconds, and for low‑ to mid‑value purchases is often based on lighter checks rather than a traditional hard credit inquiry. The merchant receives the full transaction value upfront, while the BNPL provider collects installments from the consumer and absorbs the credit risk.

Credit cards work differently. They provide a revolving line of credit with no fixed endpoint,  apply interest to balances beyond the grace period, and require a longer, more involved underwriting process based on credit bureau data and financial history.

Both defer payment and both sit at checkout, but that's where the surface-level similarities end.

For a deeper look at how BNPL works in practice, including a breakdown of regulation and reporting, take a look at our BNPL explainer.

The gap between BNPL and credit cards is narrowing fast, with both pursuing each other's territory.

Card networks are rolling out installment options at checkout, giving cardholders the choice to split payments after authorization. At the same time, BNPL providers are extending terms, expanding into longer-term credit, subscriptions, higher-value purchases, and other use cases that are starting to look a lot like traditional credit.

In practice, that means merchants and ISVs need to start supporting payment flows that don’t follow a single model. A BNPL option might sit on a card rail; a card transaction might be split into installments after authorization. 

The checkout label is starting to matter less than how flexible the payment experience is.

Where BNPL actually has the edge

BNPL isn’t a universal win, but in the right scenarios it delivers clear commercial value.

Here’s how… 

The biggest difference between BNPL and credit cards is how risk is assessed.

Card underwriting relies on established credit infrastructure - bureau data, income checks, debt ratios, and long-term scoring models. It’s a slower, deeper process designed for revolving credit, where risk is priced across the life of the relationship.

BNPL can improve approval rates in segments where cards tend to decline, but it also means the credit risk sits with the BNPL provider - not the merchant. That’s part of why BNPL fees (typically 2-8% of transaction value) are generally higher than card interchange.

No - but technically, that's not the right question we should be asking…

BNPL will continue to grow in specific pockets: fixed-price ecommerce, younger consumers, and markets where credit card penetration is lower or alternative payment rails are more established. In those areas, it's already a preferred checkout option.

But credit cards aren’t going anywhere. They’re widely accepted, deeply embedded in travel and subscriptions, and come with established protections and flexible repayment structures.

BNPL occupies a different part of the spend map, so what’s actually happening is convergence. As cards adopt installment features and BNPL providers extend terms and add card rails, the distinction at checkout is becoming less clear-cut.

Merchants who treat this as an either/or decision will find themselves behind the curve.

Because the right question is how to support both, and more, without the complexity multiplying every time a new option appears.

Most of this BNPL conversation has been online - but in-store BNPL is growing, and that brings real integration challenges that merchants and ISVs need to plan for.

Depending on the provider and market, in-store BNPL might be triggered via QR codes, embedded directly into payment terminals through app layers or softPOS, or linked to pre-approved limits tied to a customer account. Online, it’s more standardized - but across touchpoints, the experience still fragments quickly.

That fragmentation becomes more obvious when you map it out:

On the surface, BNPL is available across channels, but it’s actually still operating through multiple disconnected implementations - each tied to a specific BNPL stack.

That’s where complexity starts to build for merchants and ISVs. Every new BNPL rollout adds another integration, another set of rules, and another layer of reconciliation, and another point of friction.

This is the problem Aevi’s orchestration platform is built to solve.

By introducing a payment orchestration layer between merchants and their payment ecosystem, Aevi brings BNPL into a single managed environment. That means BNPL can be managed across in-store and online without rebuilding checkout flows each time.

Instead of fragmented integrations across channels, merchants get a single payment layer that keeps everything consistent, and the flexibility to add or swap BNPL providers without adding operational complexity.

The real risk with BNPL adoption is building checkout around a single one. 

BNPL is still fragmented, with changing regulations driving inconsistency across providers and markets. Locking checkout into one integration means every expansion becomes a rebuild - or a compromise on conversion.

A more resilient approach:

• Treat BNPL providers like acquirers: They should be swappable, stackable, and subject to the same routing logic you'd apply to any payment method. Don't build to a single provider's API if you intend to scale across markets.
• Plan for regional variation: Regulation is evolving across Europe, the US, and APAC, with BNPL moving closer to traditional credit frameworks. Your integration should be able to absorb those changes without a rebuild.
• Manage through an orchestration layer: With Aevi’s payment orchestration, BNPL providers can be managed by market without rebuilding checkout or duplicating integrations.
• Test performance by segment: BNPL impact varies by context, so performance should be tracked against card benchmarks before scaling.

The future of BNPL

BNPL won’t be replacing credit cards any time soon.

It's carving out specific segments of spend where its model genuinely serves consumers and merchants better - and it's doing that very effectively. What's changing is the expectation at checkout.

Consumers increasingly expect to see both options, alongside local wallets and alternative payment methods, presented consistently - whether they're buying on an app or at the checkout.

For merchants and ISVs, the focus is on building a payment foundation that can surface the right option for the right customer without adding complexity underneath.

That’s a payments architecture challenge, and the fix is the same as ever: stop treating every method as a standalone build, unify routing, connect data, and process all payments through a single, orchestrated layer.

Want to explore how to add BNPL to your payment estate without fragmenting it further? Get in touch with our team.