Everything About Buy Now, Pay Later App Development

Everything About Buy Now, Pay Later App Development

25 March 2022 • 14 min read

E-commerce has seen unprecedented growth since the pandemic hit the world. According to Adobe research, this sector has grown by $183 billion and reached $884 billion spent online from March 2020 to February 2021.

The introduction of new technologies and new payment solutions drive this growth. Industry solutions offer customers more and more flexibility. One of the latest booming trends is Buy Now Pay Later solutions.

Below, we'll take a closer look at this service, its key features, and the benefits it brings to both merchants and FinTech. And also, based on our experience in software engineering, we'll tell you about Buy Now Pay Later app development from scratch.

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What is the BNPL Model, and How Does it Work?

Today, consumers are more likely to seek the most flexible financing options due to the economic hardships associated with the pandemic. And Buy Now, Pay Later (BNPL) solutions allow customers to instantly buy items online or in a store and pay for them over a specified period. This process is simplified as much as possible so that customers can get a loan quickly.

At this point, the idea is well received by the market. The industry has benefited greatly, especially during the pandemic. And Buy Now Pay Later apps are becoming the new face of the E-Commerce market. By 2025, BNPL is expected to grow at a rate of 9.8% per year.

The stunning ascent of these numbers has changed the online market dynamics. Affordable BNPL is a very useful service to make the shopping experience unforgettable.

Before Buy Now Pay Later App Development: Successful Examples

Let's look at the popular Buy Now Pay Later solutions operating in this segment.


Buy Now Pay Later app development

Affirm is one of the most popular BNPL applications. Consumers can borrow up to $17,500 and repay over time with interest rates ranging from 0% to 30%, depending on the merchant. Most loans can be repaid within three, six, or 12 months without extra fees, making it very flexible for clients.

  • Availability. Affirm has 12,000 retailers. A lot of retailers offer Affirm as a payment method at checkout. Consumers can also use the BNPL option at any store that is not integrated with the company.
  • Fees. There are no late fees, but delayed payments can affect your ability to get a loan in the future.


Klarna-like app development

The BNPL service offers three different repayment options for up to 36 months of financing. The Buy Now Pay Later app also acts as a virtual personal shopper, showing customers deals, giving them shopping advice, and curating wish lists.

  • Availability. The app has 250,000 merchants connected in 17 countries. Also, there is an option to create a one-time virtual card to use online at any US retail store, including those not affiliated with Klarna.
  • Fees. Klarna charges no fees if all scheduled payments are made on time. There is also an option to fully repay the balance within 30 days without interest. However, Klarna charges a late payment fee of up to $7 for missed payments.

Paypal’s Pay in 4

Develop a Buy Now Pay Later app

PayPal has been expanding into online and offline shopping for years. And now it becomes a Buy Now Pay Later software provider. It allows splitting the purchase cost into four payments to be made every two weeks for six weeks. At the same time, the loan’s range is limited to $30 to $1500.

  • Availability. PayPal is a multinational FinTech company. Millions of merchants and banks work with the company's products. This feature is available to PayPal users aged 18 and over with an account in good standing.
  • Fees. What sets Pay in 4 apart from other Buy Now Pay Later providers is that it doesn't charge interest or late commissions. In addition, PayPal does not report to credit institutions, so late payments will not affect customers' credit scores.

The development of a BNPL app like PayPal is desirable and very much in demand. Next, we will reveal the details of creating Buy Now Pay Later software in detail.


Buy Now Pay Later solution

Afterpay is another prosperous app. The loan amount depends on the customer's history. Clients must make only one upfront payment and then pay the rest within six weeks.

  • Availability. The service works with about 100,000 merchants worldwide and more than 23,000 retailers in the US. It also offers customers the Afterpay Card for purchases in-store.
  • Fees. There is no interest, but Afterpay charges an $8 to $25 late fee if a payment is not made for ten days. And if the client does not repay on time, he will be denied access to new loans until he makes a payment.

How Does the BNPL Model Benefit the Business?

Buy Now Pay Later services are mainly useful for two audiences: E-Commerce merchants and FinTech application owners. Let's take a look at these groups.

Benefits for E-Commerce

For a long time, customers have limited their purchases for various reasons. But with BNPL, the market saw positive conversion dynamics. And this new way of looking at shopping is helping businesses earn their share. The benefits for E-Commerce are clear.

  • No cost or risk is involved for merchants while doing business.
  • People who usually don't complete their purchases due to lack of money can now shop better.
  • Those who didn't accept online payments now have a new way to attract customers.
  • Using BNPL apps, merchants can monitor users' purchasing trends and offer targeted discounts and services.

Benefits for FinTech app owners

Increasing the profitability of the online payments market worldwide is driving the development of the BNPL market. This model is gaining momentum. And it benefits not only buyers and E-Commerce but also owners of custom FinTech applications. Just look at the dynamics of this market.

  • The global market of the BNPL for E-Commerce was $4.07 bn in 2020, with an annual growth rate of 22.4% in 2021-2028.
  • The global BNPL market was worth $90 bn in 2020, and projected growth is $3.98 trillion in 2030, with an annual growth rate of around 45.7%.

How exactly does this service allow owners of FinTech apps to earn money? First, they charge a monthly fee or a small percentage of merchant transactions. Also, merchants pay for creating an account. Popular apps operate on this revenue model with only a small difference in costs.

Must-Have Features of BNPL Apps

If you plan to develop a custom BNPL solution from scratch, consider including several important features for the best user experience.


Authentication feature in Buy Now Pay Later app

Provide easy authentication and verification. When a user enters the app, make sure he won't wait too long. The fast loan proceeding will appeal to users and help you grow.

Loan Terms

Different service providers have different loan options. Keep up and make the best offers to win the trust of customers.

Payment Rescheduling and Prolongation

Give the client more control over their finances. For example, let them move the repayment date or pay in advance. This will show that you have an individual approach to each user.


Always make sure that the customer has the opportunity to reconsider their purchase and change their mind. Many Buy Now Pay Later apps like Afterpay allows users to return purchases by contacting the seller.

Account Management

Account management feature in a Buy Now Pay Later app

Make it easy for customers to find all information about their payments, orders, and personal information management. In addition, make the user experience easier by automating most operations.

Read also: How to Build a P2P Payment App

Online documents

One of the main features of the BNLP app is that they allow users to make purchases in a paperless way. The loan application and approval process are completely digital.

Referral program

Buy Now Pay Later providers have begun supplementing their services with loyalty programs. Retaining one customer costs you ten times less than acquiring a new one. A McKinsey study found that referrals bring in more than twice as many sales as paid advertising.

Notifications & Reminders

Location and reminders feature in a Buy Now Pay Later app

Win the hearts of your customers by showing special care. Remind them of installment payment deadlines so customers can avoid late fees.

And one more thing — be sure to test the application idea and make sure that it will be really profitable. For this, there are special algorithms of action.

Steps to Develop BNPL App

So how to make a Klarna like app? We advise you to think about outsourcing application development. And here's what else you can do to improve the development process:

Prepare Project Scope

If you want to build a custom Buy Now Pay Later (BNPL) payment processing app, learn more before starting a project. Who is your audience? Why do customers drop carts early? Study the market in detail and think about any possible gaps.

Find a Team

It’s important to have a strong programming team and a well-established process. It ensures that your application will be efficient, secure, and tailored to your clients' needs.

Prepare UX Design

Without a clear and well recognizable interface design, your application is doomed to be buried under a bunch of similar ones. Hire an experienced UX/UI designer to create an easy-to-navigate app with a memorable and unique brand look. Remember that the Buy Now Pay Later system design should be simple and intuitive.

Buy an Identity Verification System

ID Verification system designed to help companies understand their users. Because it's easy nowadays to create a fake identity, it's important to confirm that the person is who they say they are. Regulatory authorities require such a system for online payment services. In addition, it has become the standard of the industry. Trulioo is one of the best examples of the buy now pay later system.

Develop BNPL Application

We advise you to think about BNPL software outsourcing. Because it opens up access to a larger talent pool and lower costs. Here's what else you can do to build your own BNPL app:

  • choose the right technology stack that defines the effectiveness and safety of your product;
  • decide on the features you want to include;
  • set your success metrics to determine if it meets the needs of customers.

Check the regulations compliance

The encryption of online transactions is critical to the banking and financial sectors. Many governments have different financial rules and regulations. If you want to create a BNPL mobile app, it is important that the collection of data and the processing of information fully comply with established policies.

Test and Deploy

Run as many tests as possible before releasing your app. Make sure everything is fixed. By doing so, you will reduce bad reviews and uninstalls.

Integrate Buy Now Pay Later into your Fintech App

Due to the skyrocketing popularity of BNPL, E-Сommerce companies are looking to this new model as a possibility to maximize their income. The best realization of the API is crucial for BNPL integration. Below you can see important points that need to be considered for successful integration in the future.

  • Online payment solution. BNPL solutions become more successful when they combine multiple payment systems. It allows them to reach more sellers and increase their market share before competitors take it.
  • Points of sale. The app should easily integrate with the process of checkout that will allow the seller to get rid of annoying manual input and speed up the process for the buyer.

How much does it cost to develop a custom Buy Now Pay Later platform?

The cost to build a BNPL app depends on the following factors:

  • number of functions,
  • technical stack,
  • line-up;
  • third-party API integrations;
  • deadlines, etc.

The cost of the Buy Now Pay Later app development is negligible when you consider how many people will use it in the future. You will receive a tool that should help you achieve a level of return on your business that you never dreamed of.

However, the process has certain stages.

Discovery Phase: Estimation and UI/UX Design

Time: 280 hours

Price: $11 200

At this stage, our business analysts study the market, and customer expectations and assess the needs of the industry. All the information received serves as the basis for estimating the project's preliminary budget and agreeing with the client.

Before creating a user interface and UX prototypes, we evaluate how the selected technology stack, features, and overall aesthetic will meet the client's expectations. After that, we agree with the client on usability and screen design features and proceed to develop the application.


Time: 640 hours

Cost: $25 600

During the development phase, our team uses a previously selected technology stack to start creating a beta version of a future full-fledged product.

Testing & Deployment

Time: 240 hours

Cost: $9 600

The testing phase is especially important for collecting user feedback and gradually polishing the app's functionality. This process will make it as user-friendly as possible and make sure everything works correctly.

Once the QA team has completed their work and testing and all the app enhancements have been implemented, your app is finally ready to go to market. Post-release support is also required to add new features and stay ahead of the competition.

Technical documentation

Time: 40 hours

Cost: $1 600

This step is important to create a single document that includes all the instructions and information for your application.

Let's summarize everything said in a summary table.





Estimation and UI/UX Design

280 hours

$11 200



640 hours

$25 600


Testing & Deployment

240 hours

$9 600


Technical documentation

40 hours

$1 600


1200 hours

$48 000

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The average cost of MVP Buy Now Pay Later app with ID verification system, account management and notifications can range from $40 000 to $60 000. And the average cost of a custom solution with additional features like payment rescheduling, online documents, and others can range from $80 000 to $120 000.

Final Thoughts on how to build a BNPL mobile application

Consumers have definitely shifted their interest toward online shopping. And the future of business seems to be linked to online models based on mobile solutions. As a result, BNPL applications are experiencing a surge in popularity among E-Commerce retailers and customers. And this encourages many to offer new solutions to the market.

If you are also planning to develop a Klarna-like app, we at Softermii would love to offer you our BNPL software development services. Our company has a long history of working with clients in different parts of the world, most of which are from the US and Australia. We guarantee that everything will be done according to the agreed conditions and terms. Contact us and our team will help you create a solution that really works for you!

Frequently Asked Questions

Who is involved in the BNPL app development process?

To assemble the perfect development team capable of creating a quality BNPL application, you will need the following specialists:

  • iOS developer
  • Android developer
  • Backend developer
  • UI/UX designer
  • QA engineer
  • Mobile developers
  • Cybersecurity DevOps
  • Big Data analyst
How do you build a BNPL app?

Developing BNPL applications is no different than creating any other. However, like any high-end solution, it requires a team of experienced UX/UI designers, developers, QA engineers, and more. In addition to a user-friendly design and distinctive features, a BNPL application should have a clear structure and a set of key components.

How is BNPL different from EMI?

EMI allows you to pay in installments without paying interest. BNPL too, but with the difference that this is a mobile service that does not require an additional card, and the whole process is fast and completely paperless.

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