Editorial Team
4 min read
As the name suggests, a payment plan, or Buy Now, Pay Later (BNPL), is when you allow customers to pay for their purchase over a series of staggered installments. Historically, we saw this model thrive in subscription-based services, such as streaming media, magazines, and phone plans, are some common examples–as are car leases, apartment rentals, and many other services.
This shows that breaking purchases down into smaller, interest-free chunks isn’t just a passing fad anymore. For today’s shoppers, it’s quickly becoming the standard way they expect to pay. The question is, does offering payment plans to customers make sense for your business? If so, how do you get started?
According to a recent Federal Reserve Research Report, shoppers used BNPL to purchase a whopping $156.7 billion worth of goods in 2025. Exactly half of that—about $78.3 billion—was spent using standard “Pay in 4” plans. With the total BNPL user base on track to hit nearly 100 million Americans by 2027, breaking purchases down into smaller, interest-free chunks isn’t just a passing fad anymore. For today’s shoppers, it’s quickly becoming the standard way they expect to pay.
The question is, does offering payment plans to customers make sense for your business? If so, how do you get started?
The benefits of offering payment plans to customers
As a merchant, the primary benefit of offering payment plans is to help increase sales and boost your average order value. Breaking up a large total price into digestible chunks makes premium products instantly accessible to a much broader pool of shoppers, including those who:
- Want to Protect Cash Flow: Many shoppers have the financial resources but simply prefer not to shell out a large lump sum upfront.
- Avoid High-Interest Debt: Budget-conscious buyers are actively looking to avoid expensive credit card interest and revolving debt lines.
- Appreciate Ultimate Convenience: Funds are automatically deducted at set intervals from each customer’s linked payment source, making the process completely frictionless.
Breaking up a large total price into digestible chunks makes premium products instantly accessible to a much broader pool of shoppers. This includes customers who prefer not to shell out a large lump sum upfront, as well as budget-conscious buyers looking to avoid expensive credit card interest and revolving debt. Funds are automatically deducted at set intervals from each customer’s linked payment source. This regularity can help with cash flow, allowing you to better plan for the future.
If any of these benefits appeal to you, it may be worth offering payment plans at your business.
How to Offer Payment Plans: The Old Way vs. The Clover Way
Here is how the modern approach completely eliminates the old risks of recurring billing:
The Old Way: Merchant-Managed Billing
To offer traditional payment plans or layaway, you had to manually track invoicing and factor your long-term service costs into the final price. For example, if a customer’s retail item broke before it was fully paid for, it created awkward customer service dilemmas regarding refunds and maintenance. Furthermore, if a customer changed their card details, the business had to spend time and money chasing down delinquent accounts.
The Clover Way: Native Klarna Integration
With the native Clover and Klarna integration, you get paid the full purchase amount upfront (minus standard transaction fees), while your customers get the flexibility to spread their costs out over time. Klarna takes on all the credit and fraud risks behind the scenes. If a customer misses a payment down the road, your cash flow is never impacted.
With this setup active on your system, your business gains:
- In-store flexibility: Cashiers can select the Klarna button directly inside the standard Clover Sale or Register app. The terminal generates a dynamic QR code that customers scan to complete a secure checkout via their mobile phone in seconds.
- Seamless ecommerce experience: Online shoppers can effortlessly choose Klarna at checkout to utilize split-payment selections. Transactions automatically sync with your centralized Clover dashboard alongside your standard card sales for perfectly unified accounting and inventory tracking.
Where Recurring Billing Still Shines
While Klarna is the perfect fit for retail transactions and physical merchandise, traditional recurring billing is still an incredible tool if your business model includes ongoing subscriptions or services.
If you offer weekly meal plans, monthly membership fees, or subscription boxes, setting up automated invoicing ensures funds are regularly collected without you ever having to manually intervene.
Ready to start offering payment plans?
Whether you want to attract younger shoppers, improve your store’s cash flow, or watch your average order value grow, adding an alternative payment plan option can take your business to the next level.
Simply log into your Clover Dashboard today to check your eligibility status and activate Klarna for your business. To learn more about the PCI-compliant recurring payment solutions we offer, schedule a free consultation with a Clover Business Consultant today.
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