Buy Now Pay Later Options for Merchants Who Are High-Risk

“More than convenience – BNPL acts as a growth tool that helps to improve cash flow, increase order value and attract customers”.  

The idea sounds simple – “Buy now, pay later”. But for merchants, it’s a complex opportunity. 

Look at a real world example – “A ZIP merchant showed an increase of 20% in conversions and a 46% average increase in AOV (average value order), when BNPL was offered”.

To customers, it turns – laptop, flight booking and gold chain into smaller installments. – making every more affordable. 

But for high risk merchants, the story is more complex. 

For them, BNPL offering can be both promising and intimidating – many sectors have experienced chargebacks and legal complexities. 

Yet, BNPL is attracting buyers and driving conversions. 

Let’s break down its working, the reasons behind its popularity and how to adopt it safely. 

How BNPL Programs Work for Merchants

In simple words, while checking out, if the customer chooses the BNPL option.  A third party BNPL provider will pay the amount and will collect the payment from the customer in installments. 

For high risk merchants, this process helps to secure sales and outsource credit risk to a third party. 

Why BNPL Is Gaining Traction Among High-Risk Businesses

Earlier, new merchants used to feel hesitant while sharing large amounts of purchases. But with BNPL, it became easy to share the installment price. 

Understand this as an emotional bridge between “I want this” and “I can afford this”. 

According to FinTech  – “the Asia Pacific BNPL market is experiencing about 30% growth as active BNPL accounts in Australia”.  

Brands like Apple and Amazon are capitalizing on it, as they get flexibility here that banks can’t offer. 

BNPL Options Available for High-Risk Merchants

For high risk merchants, 3 major options are available: 

• Provider Funded: Here, BNPL pays for the merchant and manages their repayment process.
  
• Merchant Funded: A part of the financial risk is carried by the merchant, but it can manage terms with customers.
  
• Hybrid Models: Mixing both – shares risk while controlling terms.   

Top BNPL Providers in 2025 for High-Risk Merchants 

While not every provider opens doors for high risk sectors, many have:

• Corepay is a specialized provider for high risk merchant accounts, with custom integrations and fraud detection.
  
• Splittit and Sezzle – for flexible repayment terms. 

• Klarna and Afterpay – for high risk clients.
    

Benefits of Offering BNPL as a High-Risk Merchant

Benefits of offering BNPL include conversion rates, reduced cart abandonment and allowing customers to spend more. 

For merchants, it results in higher average order values. Hence, more repeat business. 

A store owner reported a 25% increase in sales after BNPL integration. Customers stated that we can “Test and Trust” the brand with smaller payments. 

Is BNPL the Right Payment Option

Before integrating BNPL into the business, merchants need to analyze some things:

• Stability of cash flow with delayed payments.
  
• Handling of fraud screening and compliance.
  
• Welcoming of customer base value installment options.
  

Relying heavily on peak seasons can make BNPL as just a safety net you’ve been missing. 

How to Choose a Reliable BNPL Provider

To decide on the right provider, look for transparency, robust APIs, protection and support for high-risk profiles. Also, look for proven experience in your industry – especially those who don’t fear terms like CBD. 

A quick tip: Read reviews, don’t just trust claims. Most advantageous support is required when something goes wrong. 

Compliance Tips for BNPL Use 

BNPL falls under the financial regulations of KYC (know your customer) and AML (anti-money laundering) laws. Merchants should look for PCI DSS compliance and track transaction records for dispute resolution. 

Compliance is not just a checkbox – it’s your shield for penalties and regulatory charges. 

Why High-Risk Customers Are Challenging 

High-risk customers are not determined to fool – just their payment behaviour swings sometimes. Few underestimate their budget, while others misuse BNPL for overlapping purchases. 

Understand this as “lending a car to your friend who’s a fast driver – you hope the best but still want insurance”.

Top 5 Rules to Identify High-Risk BNPL Behavior

Here are the five major risks to identify high risk BNPL behaviour:

• Repeated late or missed payments.
• Use of various BNPL accounts. 
• Sudden hikes in the purchase value. 
• Varying information in customer data.
• More refund and chargeback concerns. 

Fixing these early can help merchants from financial losses. 

Conclusion

For high risk merchants, BNPL isn’t just a trend – it’s a competing tool that often shuts doors too quickly. It helps to bridge the gap between cautious buyers and strategic sellers. But only works best when managed with compliance and a trusted provider. Don’t trust blindly, know and check if it will align with your business needs. 

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