Small BusinessPaymentsPayment Methods

Why Pay Later should be part of your business growth

PayPal Editorial StaffPayPal Editorial Staff

16 June 2026

16 June 2026

5 mins read

When you’re evaluating Buy Now, Pay Later (BNPL) providers, you’re making a decision that directly impacts revenue. How do you increase basket size? Improve conversion? Offer flexibility without adding cost or friction?

BNPL is now a mainstream part of online shopping – many of your customers actively expect to use it. In the UK, adoption has grown from 14% to 25% of adults in just one year, with growth across multiple age groups.¹ So the question is no longer whether you should be giving your buyers a way to pay more flexibly. The question is which setup can offer your customers payment flexibility and also help you grow your business.

Most eCommerce operators approach this decision by comparing the standalone BNPL providers. But that often means overlooking a simpler option: using what you’ve already got. If you already have PayPal at checkout, you might not be using it as part of your BNPL strategy.

What the data shows

In the UK, more than 22,000 merchants offer PayPal Pay Later², and more than 6 million customers have used Pay in 3.³ With this level of adoption, Pay in 3 is already a familiar and widely used option for a huge number of shoppers.

The clearest place to see its impact is in basket sizes. In the UK, PayPal Pay in 3 average order value (AOV) is 129% higher than standard PayPal transactions.⁴ When customers can spread the cost they are more likely to proceed with higher value purchases, increasing overall basket size.

In a UK SMB merchant analysis, making Pay Later more visible across the shopping journey was associated with stronger performance within the broader PayPal Checkout experience. In this sample, Pay Later payment volume was observed to be 49% higher post activation,⁵ while Pay Later transactions increased by 38.8%.⁵ First time Pay Later usage was also 47.7% higher,⁵ alongside a 19.6% increase in repeat transactions.⁵ These patterns indicate higher engagement with Pay Later among both new and returning customers following activation.

For merchants, the implication is clear: offering instalments within an existing PayPal Checkout flow can reduce friction at the point of payment and support more completed purchases.

The impact continues beyond a first transaction. Around 97% of Pay Later users in the UK return to use it again,⁶ and Pay in 3 users complete an average of seven Pay in 3 transactions per year.⁷ This shows Pay in 3 is not just a one off checkout choice, but an option customers return to again and again, driving ongoing value over time.

Taken together, these figures highlight why PayPal Pay Later should be evaluated as more than a checkout feature. It acts as a growth lever, influencing basket size, repeat usage and checkout performance within a single, existing payment setup.

Impact across your customer base

The impact of PayPal Pay in 3 isn’t limited to a specific type of shopper. Its UK user base spans generations, including 26% Gen X, 47% Millennials and 24% Gen Z.⁸ That reach matters commercially. It means Pay in 3 isn’t just relevant for one segment. It can influence purchasing behaviour across your customer base.

The commercial impact can be particularly evident when purchases are more considered or basket values are higher. In these situations, where affordability plays a bigger role in decision making, the ability to spread the cost can be the difference between browsing and buying.

Why familiarity at checkout matters

Familiarity plays a critical role at the point of purchase.

PayPal Pay in 3 is offered within an existing PayPal Checkout experience used by more than 400 million customers worldwide.⁹ At the moment of decision, that matters. Customers are evaluating affordability, but they’re also deciding whether the transaction feels clear, simple and trustworthy. A familiar payment experience reduces friction and supports confidence at that final step.

Pay in 3 creates a more user friendly experience at multiple levels. It’s interest free, with no late fees and no setup fees, making it straightforward for customers to understand. It also forms part of the wider PayPal experience, including the PayPal Plus rewards programme for eligible purchases.

Together, these factors make PayPal Pay in 3 easier to adopt at the point of purchase.

A more merchant-friendly approach to BNPL

For many merchants, the key BNPL question is whether the uplift justifies the cost and complexity.

With PayPal Pay in 3, there’s no additional provider to integrate, no separate cost structure to manage, and no disruption to your existing checkout. It’s included within PayPal Checkout, with no monthly or setup fees. You simply pay the standard PayPal transaction fee of 2.99%, and still get paid up front, in full – PayPal carries the instalment risk.

That changes the nature of the decision. Instead of introducing a new provider with its own costs, implementation and customer flow, you can offer instalments through a checkout setup many already have in place.

The result is a more efficient way to deliver BNPL, combining payment option flexibility with stronger basket value, repeat usage and minimal added complexity.

Why PayPal Pay in 3 delivers

BNPL is no longer just a feature decision. It’s a performance decision.

Merchants need to look beyond whether instalments are available, focusing on how they’re delivered and what impact they have on conversion, basket size and customer behaviour.

PayPal Pay in 3 takes a different approach. By embedding instalments into an existing, trusted checkout experience, it removes friction, drives adoption and delivers measurable commercial impact.

Discover more about PayPal Pay in 3 now.

Related content

If you accept cookies, we'll use them to improve and customise your experience and enable our partners to show you personalised PayPal ads when you visit other sites. Manage cookies and learn more