BigCommerce turns on buy-now, pay-later options for merchants

As inflation has diminished the buying power of consumers, more are turning to buy-now, pay-later (BNPL) options to afford their everyday items.

E-commerce platform BigCommerce (NASDAQ: BIGC) is now making BNPL options available to its merchants, announcing a deal with Affirm on Tuesday.

“Innovative, digital payment options have become increasingly essential for merchants to offer their customers at checkout. Additionally, consumers, especially younger generations, are demanding transparency from their chosen providers,” said Mark Rosales, vice president of payments & fintech at BigCommerce. “Affirm’s scale and reliability, combined with the unparalleled flexibility and transparency they offer consumers, make them an obvious choice and great pay-over-time solution for our merchant network.”

The BNPL market is estimated to be at least $100 billion a year, and some analysts believe it could reach into the trillions in the coming years. The Financial Brand estimates some 59 million U.S. buyers will use a BNPL service this year.

BNPL allows customers to buy items either online or in-store and pay in equal installments, usually four payments. Unlike a credit card, the BNPL firm charges the retailer a fee for the service rather than the consumer. The consumer receives the item upon completion of the transaction.

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Companies in the space are struggling as inflation takes hold. Affirm (NASDAQ: AFRM) posted a $520 million loss through the nine months that ended March 31 and a $182.6 million provision for credit losses during that time frame. Competitor Klarna posted an operating loss of $688 million last year and in May laid off 10% of its workforce. Afterpay, another competitor, lost $113 million in its fiscal year, which ended in June.

Still, consumers are flocking to the service, and BigCommerce is making it available to its e-commerce brands. The Financial Brand said almost a quarter of global e-commerce transactions by 2026 could be completed through a BNPL service, and 45% of those that have used it have done so to make purchases that didn’t fit into their budget. The publication also said 56% of users prefer BNPL to credit cards and 51% use it at least once every three months.

BigCommerce is making Affirm’s services available with its Control Panel. Once enabled on a brand’s site, eligible consumers will see biweekly and monthly payment options side by side. Purchases must be between a minimum of $50 and a maximum of $17,500 to be eligible.

According to data released by BigCommerce, merchants that use Affirm at checkout have reported an 85% higher average order value, 26% increase in cart conversions and a 20% repeat purchase rate as compared to other payment options.

“More than ever, consumers are looking for flexible ways to pay that deliver affordability, predictability and control,” said Scott Williams, vice president of strategic partnerships at Affirm. “In fact, recent Affirm data shows that nearly two-thirds of consumers plan to use a buy-now, pay-over-time solution for purchases this year.”

BigCommerce said merchants will receive the full price of the item(s) sold, less any fees, within one to three business days. Affirm will be responsible for payment collection.

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