Introduction

The financial sector is undergoing a rapid transformation, driven by fintech innovation that is reshaping how consumers and businesses transact. Among the most significant shifts is the rise of Buy Now, Pay Later (BNPL), an alternative to traditional credit that is gaining traction worldwide. For banks and payment service providers (PSPs), offering BNPL is no longer just an option—it’s essential for remaining competitive in an evolving market.

The Rising Popularity of BNPL in Financial Services

BNPL is no longer confined to fintech startups. Major banks and PSPs are entering the space, recognizing the growing consumer demand for flexible financing at checkout. Customers now expect seamless pay later and installment options, integrated directly with their trusted financial institutions. As a result, BNPL is becoming a powerful tool for financial service providers looking to:

• Retain existing customers by offering modern, flexible payment solutions.
• Attract younger demographics who prefer BNPL over traditional credit cards.
• Compete with fintech disruptors that have built strong BNPL-based customer relationships.

The Challenge: Build or Partner?

While the benefits of BNPL are clear, financial institutions face a critical decision: should they build their own BNPL solution or partner with an external provider? Each approach comes with challenges:

• Building an in-house BNPL solution requires significant investment in technology, compliance, and operational infrastructure. The process is complex, time-consuming, and resource-intensive.
• Partnering with a third-party BNPL provider may offer a quicker solution, but it comes with trade-offs. Many third-party BNPL brands operate as direct-to-consumer businesses, creating a risk of brand dilution and potential loss of customer relationships. Additionally, data-sharing concerns may arise when working with external providers.

White-Label BNPL: The Best of Both Worlds

White-label BNPL offers a compelling alternative. By adopting a white-label solution, banks and PSPs can:

• Offer BNPL under their own brand, ensuring a consistent customer experience.
• Maintain control over customer relationships and transaction data.
• Avoid the high costs and complexities of building an in-house solution while still reaping the benefits of BNPL.

Key Benefits of White-Label BNPL for Banks and PSPs

1. Increased Revenue Streams

By integrating BNPL, financial institutions can tap into new revenue opportunities, including transaction fees, interest earnings, and merchant partnerships—all without the operational complexity of building a solution from scratch.

2. Seamless Integration

A white-label BNPL solution can be embedded directly into existing digital banking apps, payment platforms, and checkout experiences. This ensures a frictionless process for both merchants and customers, strengthening engagement and loyalty.

3. Regulatory Confidence

Financial services are highly regulated, particularly in the EU and the DACH region. A fully compliant white-label BNPL solution allows banks and PSPs to offer installment payments without the burden of navigating complex financial regulations on their own.

How to Implement White-Label BNPL Effectively

For banks and PSPs looking to integrate white-label BNPL, a strategic approach is key:

• Choose a provider that meets local compliance standards to ensure seamless regulatory alignment.
• Prioritize user experience by delivering an intuitive and frictionless checkout process for merchants and consumers.
• Leverage data-driven insights to tailor BNPL offerings, optimize risk management, and enhance customer engagement.

Conclusion

As BNPL continues to gain momentum, financial institutions that fail to embrace it risk losing relevance in an increasingly competitive landscape. Payla’s White-label BNPL technology platform provides a powerful solution—offering all the advantages of flexible payment options while preserving brand identity, customer relationships, and regulatory compliance. For banks and PSPs, the time to act is now.

Introduction

Buy Now, Pay Later (BNPL) started as a way to help merchants increase conversions by offering flexible payment options. Klarna was a pioneer in this space, and as someone working in the same industry, I can’t help but admire its success. However, Klarna has evolved beyond its original purpose—shifting from a payment solution to a competitive marketplace. This transformation has significant implications for merchants and payment service providers alike.

Klarna’s Shift: From Payment App to Shopping Platform

BNPL was once about enabling merchants to sell more by removing friction at checkout. Today, Klarna’s app is no longer just a payment tool—it’s a shopping destination. When consumers browse Klarna, they don’t just see their chosen merchant’s products; they see competing offers, sometimes at better prices or with more availability.

The shift is clear: Klarna is no longer just facilitating purchases; it’s influencing where those purchases happen. The customer journey has moved away from merchants’ own websites and into Klarna’s ecosystem, where Klarna—not the merchant—controls the experience.

The Trojan Horse: How Merchants Lost Control

For years, payment service providers have actively promoted Klarna to merchants, positioning it as a tool for customer acquisition and conversion optimization. But the reality is different: merchants are now competing within Klarna’s marketplace, often bidding against each other for visibility.

Klarna’s approach is brilliant: provide merchants with marketing budgets to advertise within its platform, only for those same merchants to find themselves in direct competition. Effectively, they’re paying to “buy back” customers they originally acquired. Klarna has positioned itself as the central player, while merchants are reduced to logistics providers fulfilling orders within Klarna’s ecosystem.

What This Means for Merchants

• Customer Ownership is at Risk: The direct relationship between merchant and customer is weakened as Klarna becomes the primary touchpoint.
• Price Transparency Works Against Merchants: Customers can easily compare and switch to the lowest-priced option within Klarna’s marketplace.
• Marketing Spend is Redirected: Instead of driving traffic to their own websites, merchants are funding Klarna’s marketplace dominance.

The Future of Klarna: Beyond BNPL

Klarna’s trajectory suggests it is no longer competing with other BNPL providers like Affirm—it’s setting its sights on becoming the go-to shopping platform, much like Amazon. This evolution raises critical questions for merchants and payment providers: Should they continue enabling Klarna’s ecosystem, or is it time to rethink BNPL strategies?

Conclusion

Klarna’s transformation from a BNPL service to a full-fledged marketplace is a testament to its innovation. However, for merchants, the trade-off is clear: convenience comes at the cost of customer ownership and direct relationships. The question isn’t whether Klarna will continue evolving—it already has. The real question is: Will merchants recognize the shift and adapt their strategies accordingly?

Introduction

Buy Now, Pay Later (BNPL) has revolutionized the way consumers and businesses handle transactions. By offering flexible payment options, BNPL boosts sales and enhances customer satisfaction. However, despite its benefits, many businesses hesitate to adopt BNPL due to concerns about third-party branding, operational complexities, and losing control over the customer experience. This is where white-label BNPL solutions come into play—delivering all the advantages of BNPL while preserving a merchant’s unique brand identity.

The Growing Demand for BNPL

BNPL adoption has skyrocketed in recent years, extending beyond the B2C sector into B2B transactions as well. Consumers and businesses alike value the flexibility of installment payments, making BNPL a must-have offering in today’s competitive market. Marketplaces, banks, and payment service providers (PSPs) recognize the potential of BNPL but want to offer it without diluting their own brand authority. A white-label BNPL solution enables them to do just that.

What is White-Label BNPL?

White-label BNPL is a payment solution that allows businesses to offer delayed payment options and installment-based payment options under their own brand. Unlike traditional BNPL services, which prominently feature third-party providers, white-label BNPL ensures that customers experience a seamless checkout process without distractions from external brands. This means:

• The payment journey stays within the business’s ecosystem.
• Customers remain engaged with the merchant’s brand from browsing to purchase.
• Businesses maintain full control over customer interactions and transaction data during the transaction lifecycle

By eliminating third-party interference, white-label BNPL strengthens brand loyalty while providing all the benefits of a standard BNPL service.

Why Businesses Choose White-Label BNPL

Businesses across industries are increasingly turning to white-label BNPL solutions for several key reasons:

1. Brand Consistency

Maintaining brand trust and credibility is essential. White-label BNPL allows businesses to offer flexible payment options under their own name, ensuring that customers associate the payment experience with their brand rather than a third-party provider.

2. Faster Market Entry

Building a BNPL infrastructure from scratch requires significant time and resources. By opting for a white-label solution, businesses can quickly integrate BNPL into their checkout processes without the hassle of in-house development.

3. Regulatory Compliance

Navigating the complex regulatory landscape of BNPL can be daunting. White-label BNPL providers ensure that the solution is fully compliant with local financial regulations, allowing businesses to offer BNPL without worrying about legal complexities.

The Competitive Edge in the DACH Market

The DACH region (Germany, Austria, Switzerland) presents unique challenges and opportunities for BNPL adoption. Businesses in this region prioritize:

• Strong Brand Presence: Customers in the DACH market value trust and familiarity. White-label BNPL ensures that businesses maintain a direct relationship with their customers, reinforcing brand identity.
• Data Privacy & Security: European consumers are highly conscious of data protection laws. A white-label BNPL solution allows businesses to retain control over customer data, ensuring compliance with GDPR and other local regulations.
• Seamless Integration: Our white-label BNPL solution is designed to align with the specific needs of the DACH market, providing businesses with a smooth, localized payment experience that meets both regulatory and customer expectations.

Conclusion

As BNPL continues to grow in popularity, businesses must carefully consider how they implement this payment solution. Payla’s White-label BNPL solution offers the perfect balance—providing all the benefits of pay later payments while keeping customer engagement within the brand’s ecosystem. For businesses looking to differentiate themselves in the competitive DACH market, white-label BNPL is not just an option; it’s a strategic advantage.

Introduction

Customer loyalty is the lifeblood of any business. In today’s competitive landscape, offering convenient and flexible payment options can determine whether customers stay with a brand or switch to competitors. Buy Now, Pay Later (BNPL) solutions have emerged as a powerful tool to boost conversion rates and encourage repeat purchases. However, successful implementation is key to ensuring BNPL strengthens—rather than disrupts—the customer experience.

The Role of BNPL in Customer Retention

BNPL is more than just a payment method; it plays a crucial role in shaping customer purchasing behavior. By streamlining the purchase process, BNPL leads to:

• Higher order values – Customers are more likely to make larger purchases when flexible financing is available.
• Increased repeat business – Shoppers prefer returning to brands that offer payment flexibility.
• Better customer lifetime value – Businesses that integrate BNPL effectively see higher transaction sizes and stronger long-term customer relationships.

Why Seamless Integration is Crucial

While BNPL has clear benefits, a poorly implemented solution can frustrate customers and lead to abandoned carts. The key to success lies in seamless integration, which ensures that:

• The checkout experience remains smooth – Customers should not face unnecessary friction when selecting BNPL as a payment option.
• Brand trust is maintained – White-label BNPL solutions allow businesses to offer BNPL under their own brand, preventing customer redirection to third-party providers.
• Customer relationships are strengthened – A well-integrated BNPL system fosters brand loyalty by keeping the payment journey within the business’s ecosystem.
• The customer journey continues beyond the checkout – Most White-Label solutions disregard the payment journey beyond the checkout – even though especially within BNPL the customer interacts at least 3-4 weeks with the payment process.

Key Best Practices for Implementing BNPL

To maximize the impact of BNPL on customer retention, businesses should follow these best practices:

1. Offer BNPL at Every Customer Touchpoint

BNPL should be accessible not only at checkout or point-of-sale but also in email promotions, product pages, and loyalty program incentives or loyalty apps. This ensures customers are aware of their flexible payment options throughout their shopping journey.

2. Ensure a Fast and Transparent Process

Customers expect a hassle-free experience. Simplify BNPL application steps, minimize required information, and provide clear repayment terms to enhance trust and usability.

3. Leverage Data for Personalization

Use purchase history and behavioral insights to offer tailored BNPL options. Personalized financing offers can improve conversion rates and deepen customer engagement.

4. Maintain Brand Consistency

Redirecting customers to third-party BNPL providers can weaken brand loyalty. A white-label BNPL solution keeps customers within the business’s ecosystem, reinforcing brand trust and ensuring a cohesive shopping experience.

The Business Impact of White-Label BNPL

Implementing a seamless, branded BNPL solution delivers measurable business benefits, including:

• Higher conversion rates – Customers are more likely to complete purchases when BNPL is smoothly integrated.
• Reduced cart abandonment – A frictionless BNPL experience encourages shoppers to finalize their transactions.
• Stronger customer trust and loyalty – Businesses maintain full control over customer interactions, reinforcing long-term relationships.
• Greater financial flexibility for customers – BNPL enables customers to manage their budgets more effectively while keeping them engaged with the brand.

Conclusion

A seamless, white-label BNPL solution is a game-changer for customer retention. By offering flexible payment options without disrupting the brand experience, businesses can strengthen loyalty, reduce friction, and drive sustainable growth. With a thoughtful integration of Payla’s BNPL platform, it does not encourage only one-time purchases—it creates a loyal customer base that returns again and again. Find out, how Payla has implemented such solutions with its exiting partners.