Lissa Fryxell laid out a perfect scenario on Firing The Man that really gets to the heart of how to use Buy Now, Pay Later (BNPL). Imagine you sell a product with a high average ticket. Offering a BNPL option seems like a no-brainer. It breaks a intimidating price tag into manageable chunks, lowering the barrier to purchase for a customer who is on the fence. But Fryxell points out a crucial detail many merchants miss: that process often pulls your customer away from your website. They get handed off to Affirm or Klarna's site to get approved and finalize the payment plan, and then get sent back to your confirmation page. In that hand-off, you lose them at the most valuable moment. The opportunity for a crucial cross- or upsell right after their card is charged is completely gone. You have to decide if the conversion is worth giving up that chance to increase their order value even further.
So the question becomes a strategic one. Are you playing a game of pure customer acquisition and conversion, where getting the sale at any cost is the top priority? If so, BNPL is a powerful tool. As Vince Talbert explained on Ecommerce Conversations years ago when discussing its precursor, Bill Me Later, these services have a huge psychological impact on spending habits, often increasing impulse purchases and lifting average order value. The customer feels the emotional reward of the purchase immediately while deferring the financial pain. For many online stores, this is a clear win. It helps you acquire new customers and decrease cart abandonment, especially for those bigger ticket items. You just have to be willing to accept the trade-offs: the transaction fee charged by the provider and, as Fryxell noted, the lost upsell.
But what if your business model doesn't fit that mold? Diana Birsan, co-founder of the deposits app Downpay, offered a compelling counter-story on the Shopify1Percent podcast. She works with brands that sell high-ticket, made-to-order, or pre-order products. For them, the standard BNPL model can be a terrible fit. First, the fees, which Birsan notes can be 6-10% of the sale, are painfully high. Second, the financing model isn't ideal for products with a long lead time. The customer is making payments on an item they won't receive for weeks or months, which can feel disconnected.
Birsan’s alternative is a simple, trust-building deposit system. Instead of financing the full amount through a third party, the customer pays a smaller portion of the price up front to secure their order. This creates a psychological commitment without the friction of a financing application or the high cost to the merchant. The results she shared are staggering. Some merchants using this partial payment model saw conversion rates increase by as much as 47%. This is a powerful reminder that BNPL isn't a silver bullet. For the right kind of product, like a custom piece of furniture or a pre-ordered electronic, inviting a customer to