Buy now pay later services are becoming one of the biggest benefactors during the current crisis; consumers have turned to these services to help split up payments for essential items in the office, kitchen and even for fitness; services charge between 3 and 6 percent per transaction, retailers would normally pay between 1 and 2 percent on interchange fees when a purchase is made by credit or debit card; merchants are willing to pay the higher price in an effort to convert more customers especially as more brick and mortar stores are closed; Splitit has seen a 78 percent cart conversion and AfterPay has seen a 22 percent increase in conversion; Affirm has seen increases in average order values by 85 percent and Klarna has seen a 45 percent increase in order values; the companies take on the risk as the retailer is paid right away and so the credit risk models for these companies will certainly be tested; many will not allow additional transactions until current balances are paid in full as a means of enticing the consumer to stay current. Business Insider
