5 Pros and Cons of Buy Now, Pay Later for Small Businesses

October 13, 2023   

Buy Now, Pay Later for Business is a payment option that enables customers to purchase goods and services now and pay later. For small businesses, this can offer a range of benefits and drawbacks. It is necessary to weigh the pros and cons of buying now and paying later in Australia as a viable option for your small business.

BNPL is a payment method that allows customers to pay for goods or services over time, usually interest-free. There are five pros and cons to buying now and paying later for small business services mentioned for using a BNPL as a payment method, but there are also some drawbacks to consider as a small business owner.

What Is BNPL (Buy Now, Pay Later)?

Buy Now, Pay Later (BNPL) is a payment solution that has gained popularity over the past few years. BNPL allows customers to buy products or services upfront and pay in installments over a period of time. This payment option is attractive to customers with less funds to make a large purchase upfront but can afford to make smaller payments over time.

BNPL can also benefit small businesses by increasing sales and customer loyalty. Small businesses should carefully weigh the pros and cons of ‘buy now, pay later’ services before deciding whether to offer this payment option to their customers.

The Pros and Cons of ‘Buy Now, Pay Later Services in Australia

One of the advantages of Buy Now, Pay Later solutions is their convenience. Before deciding to look for Buy Now, Pay Later: Advantages & Disadvantages:

The Pros and Cons of ‘Buy Now, Pay Later Services in Australia

Pros of Buy Now, Pay Later 

Buy now pay later for business Australia offers several advantages for small businesses:

  • Increased Sales

BNPL services can attract more customers and offer flexibility on purchases without an immediate financial burden. It can lead to increased sales for small businesses. Pros and Cons of Buy Now, Pay Later Models for Businesses can attract more customers who cannot afford the purchase. 

  • Easy Implementation

BNPL services provide businesses with a payment method for products or services, even if customers pay in installments. It can help maintain a steady cash flow, allowing companies to manage their finances more effectively.

Offering BNPL options can enhance customer satisfaction and loyalty. Customers appreciate the flexibility, which can encourage them to return to the same business for future purchases.

  • Higher Average Transaction Value

BNPL services often result in higher spending per transaction. Customers might be inclined to buy more or higher-value items when they can spread the cost over several payments. Integrating BNPL services into a small business’s payment system is straightforward. Many providers offer user-friendly platforms and APIs, making them accessible to companies of all sizes.

  • Competitive Advantage

Providing BNPL options can give small businesses a competitive edge. It differentiates them from competitors and can attract customers looking for flexible payment solutions.

  • Reduced Risk of Bad Debt

BNPL service providers typically handle the credit risk associated with delayed payments. Small businesses are guaranteed income regardless of whether customers default on their payments to the BNPL provider. Bookkeeping professionals in Perth are experienced in handling various accounting software and can provide accurate and efficient bookkeeping services for your business.

Cons of Buy Now, Pay Later

  • Fees

BNPL service providers often charge businesses fees for using their platform. These fees can eat into the profit margin, especially for smaller transactions. BNPL services can encourage customers to make purchases they can’t afford in the long term. If customers accumulate debt across multiple BNPL services, it could lead to financial stress, impacting their ability to make future purchases.

  • Potential Cash Flow Issues

While BNPL services can improve cash flow in the short term, businesses face challenges if a significant portion of their revenue comes from delayed payments. Managing multiple payment schedules can become complex and impact financial planning.

  • Dependency on Third-Party Providers 

Small businesses relying heavily on BNPL services might become overly dependent on these third-party providers.  The best small business accountant in Perth has experience working with small businesses. Consider their expertise in tax planning, bookkeeping, financial advising, and compliance with regulations.

  • Risk of Default

Although BNPL providers often handle the risk associated with customer defaults, businesses might not receive a full payment if a customer defaults on their installment payments. This risk is transferred back to the company in certain situations. The regulations surrounding BNPL services could change, impacting how businesses can offer these options to customers. Adapting to new rules might require additional resources and changes to existing business practices. Small business financial planners provide financial planning services tailored to your small business needs. It can include budgeting, cash flow management, tax planning, financial analysis, and business forecasting.

  • Customer Confusion

They should fully understand the terms and conditions, leading to disputes and dissatisfaction. Some customers might feel pressured or misled into using BNPL services, leading to negative perceptions of the business. If customers have negative experiences with these services, it could harm the relationship between the customer and the company. Small business accountants in Perth offer a range of accounting and advisory services specifically tailored for small businesses.


In conclusion, the Buy Now, Pay Later (BNPL) model can be a double-edged sword for small businesses. On one hand, it can help them increase sales and customer loyalty, especially among younger generations who prefer flexible payment options. On the other hand, BNPL can also lead to higher costs, lower margins, and bad debt if not managed properly.

Small businesses should carefully evaluate the pros and Cons of Buy Now and Pay Later and choose a provider that suits their needs and budget. Additionally, they should communicate transparently with their customers about the terms and conditions of BNPL to avoid misunderstandings and disputes.