The true cost of BNPL for your online store (and what to offer instead)

"Customers love paying in instalments — so why is my margin shrinking?" It's a question more online stores are asking as Buy Now Pay Later becomes a checkout default. The flexible payments are working. The fees attached to them are quietly eating the upside.

BNPL merchant fees in Australia typically run 4–6% of each sale, plus a fixed fee of around 30 cents (CreditorWatch). Standard card processing is far cheaper: the Reserve Bank of Australia puts the average cost of accepting cards at well under 2% of transaction value, and below 1% for many merchants (RBA, 2022). That makes BNPL roughly three to four times the cost of taking a card on every sale that runs through a provider. The question worth asking is what you're actually paying for — and whether you need to pay it at all.

What that fee actually costs you

The percentages sound small until you run them across a year of trading. The gap between a card rate and a BNPL rate compounds on every order.

• On a single $200 sale. A 5% BNPL fee plus a ~30c fixed fee costs you about $10.30. The same sale on a card at ~1.5% costs around $3. That's roughly $7 gone per order, on the payment method alone.
• Across $500,000 in annual sales. A gap of around 3.5 percentage points works out to roughly $18,000 a year — money leaving your business for a payment method, not a product or a marketing channel.
• On your slimmest-margin lines. A three- to four-point fee swing can be the difference between a profitable sale and a break-even one, especially on discounted or competitive stock.

Why BNPL charges so much

That higher fee isn't arbitrary. BNPL providers pay you up front and then collect repayments from your customer over time, which means they are lending money and carrying the repayment risk. Industry research consistently points to this as the core driver of BNPL pricing.

• They front the cash. Advancing the full purchase price is a credit product, and credit has a cost of capital baked in.
• They absorb defaults. Some customers won't repay, and that loss is priced into what every merchant pays.
• They carry compliance. As lending, BNPL increasingly sits under consumer-credit rules, and that overhead flows back into fees.

You're not just paying to offer instalments. You're subsidising someone else's lending book. For the full breakdown of why this is lending and Flexilay isn't, see why Flexilay isn't BNPL.

What to offer instead

Flexilay delivers the same flexible-payments upside — affordability for the customer, more completed sales for you — without the lending fee, because it isn't lending. It's payment scheduling.

	Buy Now Pay Later	Flexilay
Merchant fee	~4–6% plus a fixed fee per transaction	Your normal processing rate
Who funds the purchase	The provider (priced into fees)	Nobody — the customer pays over time
Lending risk	Priced into your fee	None to manage
Where funds flow	Through the provider	Through your own connected provider

Because no one fronts the money, there's no repayment risk to price in. Payments run through your own connected provider, like Stripe — Flexilay never holds customer funds — and you keep control of the goods, or the invoice stays open, until the plan completes. No credit checks, no debt, no margin hit.

The bottom line

BNPL charges a lending premium for a payment behaviour you can offer yourself. If your customers want to pay over time, you don't have to rent that flexibility at 4–6% a sale. You can schedule it at the rate you already pay to process a card.

Ready to optimise what flexible payments cost you? See how it works, browse the connectors you can plug in, or sign up to start offering LayBy without the fee.