Realizing the full value of BN/PL platforms

Address key customer experience and operational implications now to drive long lasting growth

Alana Widdess

Alana Widdess

Director, Connected Commerce, KPMG US


Dave Martin

Dave Martin

Principal, Customer Advisory, Connected Commerce, KPMG US

+1 617-852-8245

Over the past 18 months, the financial strains caused by the pandemic, coupled with the inevitable shift to eCommerce, mean that the retail space has seen the return of layaway business models.

The latest versions are centered around “Buy Now, Pay Later” (BNPL) technology platforms and are revolutionizing the retail omnichannel shopping experience. Most notably, younger credit-averse Millennials, Gen-Z, and creditworthy shoppers of all ages have welcomed the opportunity to spread out their payment periods for low- to high-ticket items. Subsquently, these point-of-sale loans for the younger generations are on the rise.

29 million adult American consumers used BNPL models for retail purchases in the last 12 months—almost one-quarter of those did so to manage their spend and build their credit scores, accordining to, July 21.

These platforms have provided a lifeline to many retailers, allowing them to both drive new traffic and convert customers who otherwise would have abandoned the cart at checkout. However, this BNPL business model has notable differences from the layaway models of the past.

The evolution of layaway

Traditionally, layaway is a purchasing method that allows customers to place a deposit and make smaller payments on an item to “lay it away” for later pick-up when they are able to pay off the balance. Layaway is generally aimed towards shoppers with limited income who may struggle to pay for big purchases in one lump sum.

As the layaway model continues to evolve, fintechs have taken the opportunity to reimagine installment payment platforms and reinvigorated the layaway model by normalizing the use of point-of-sale loans for everyday low purchase, which is a substantial shift from the traditional layaway model.

As part of the shift, BNPL companies are now taking on the financial risk and burden that traditionally sat with the retailer. In addition, this evolution is making the purchasing process increasingly seamless and user friendly for the customer by offering flexible installments at the point of sale, enabling the shopper to control their own payment journey.

BNPL represents a seismic shift in payments for both customers and retailers. Subsequently, retailers are having to respond quickly to enjoy the benefits associated with BNPL.

Yet, the introduction of BNPL is not without challenges…

Adopting BNPL requires careful consideration

Success in BNPL requires retailers to review and challenge their entire commerce value chain, from search and purchase to returns.They need to consider the broader implications that this new payment platform will have on their organization, from managing the customer journey and experience to its impact on wider business operations.

Approaching with caution and full consideration of all elements early on in the process will help ensure retailers maximize the benefits of BNPL. Questions to consider include:

  • What IMPACT will this have on my customer experience?
  • How will I address customer personalization and customization?
  • What IMPACT will this have on how I process refunds and returns—which are often on different payment paths?
  • What IMPACT will this have on my financial forecasting? And how do I make the updates to accounting and revenue recognition processes?
  • What IMPACT will this have on cyber and privacy concerns?

The evolution of BNPL is an excellent example of such an opportunity that, when well implemented, provides a key facet of a future-ready commerce operating model.

Commerce business objectives

Maximizing the value of BNPL for your business

The long-term benefits of change can only be realized when the entire commerce value chain is considered. As such, we review the customer journey, the product, and the transaction from discovery through fulfillment.

It is important to identify opportunities to optimize and enable your digital commerce business model, technology stack, and supply chain transformation at each stage. By leveraging our proprietary tools, accelerators, and assets, KPMG can efficiently create and validate digital customer engagement, orchestrate technology strategies, and more in order to thoroughly integtrate BNPL into your commerce operating model, thus enabling a flexible response to customer expectations while helping to ensure efficient workflows and processes running across the front, middle, and back office. Furthermore, this allows retailers to manage financial forecasting obligations, security, and risk strategies while delivering on order fulfillment commitments, including refunds and returns.

Finally, this adds real value to digital channels, attracting more customers to your website, helping differentiate their buying experience, increasing conversion rates at checkout, and extending your brand and products to a growing number of young/creditworthy shoppers.

How KPMG can help today (and in the future)

KPMG recognizes that today’s business leaders don’t just need solutions; they need reliable business partners. Whatever your sector, KPMG can add value at any point in your business transformation journey.

Our Connected Commerce practice brings an innovative perspective to your business. We not only understand the value that these point-of-sale payment platforms offer, but more importantly, we work alongside your teams to redesign the operating model to thoroughly integrate the new BNPL payment workflows and processes across the front, middle, and back office.

This holistic approach means that our focus is on identifying and addressing potential risks to the smooth implementation of new technologies while simultaneously allowing the team to identify opportunities to boost profits and enhance the customer experience.

We’re alongside you at each stage of the process.

For more information on how the KPMG Connected Commerce practice can help, please visit.