The Smarter Enterprise Financing Mix: Where BNPL Fits Alongside Private-Label Credit

New Forrester research suggests those needs differ in meaningful ways.¹ This article looks at where private-label credit and BNPL can each fit within an enterprise financing strategy, how the two relate across the shopper relationship, and what buyers should evaluate when considering both.

Key takeaways

• Merchants offering both BNPL and private-label credit generally treat them as complementary rather than competing.
• Private-label credit and BNPL are associated with different shopper motivations, reducing the case for treating them as direct substitutes.
• Most merchants offering both do not believe BNPL cannibalizes private-label credit, so incremental value is worth measuring.
• An enterprise financing strategy should define the role of each option by shopper need, purchase context, and business objective.

Do you have to choose between BNPL and private-label credit?

BNPL offers shoppers flexible payments over time, while private-label credit cards drive brand loyalty through exclusive sales and rewards.

Forrester's survey of US retail decision-makers found distinct reasons for using each option. Merchants associated private-label credit with exclusive sales and events (68%), brand loyalty (58%), and rewards or discounts (52%).¹ While BNPL was more closely associated with spreading payments over time (47%) and access to low- or no-interest credit (43%).¹

Enterprise checkout strategies should accommodate multiple payment preferences and purchase contexts. Coupled together, private-label credit and BNPL cover more of the buying journey than either does alone.

Which shoppers use each option, and when?

Merchants in the Forrester survey described different audiences for each option. They reported that 48% of Gen Z consumers exclusively or mostly use BNPL, compared with 21% who use private-label credit. Millennials split about evenly (33% and 31%), and the lean toward private-label credit grows with each older generation. Loyalty reverses the pattern. Merchants reported that 65% of brand-loyal consumers exclusively or mostly use private-label credit, compared with 12% who use BNPL, and reward-motivated consumers lean the same way, at 57% and 16%.¹

These differences suggest each option can play a different role across the customer relationship. Use this framework as a starting point for mapping shopper need to the right financing option:

Decision framework informed by Forrester BNPL Opportunity Snapshot.

Does BNPL cannibalize private-label credit?

A common question for enterprise merchants with an established private-label credit program is whether adding BNPL will pull spend away from it. Forrester's survey of merchants who offer both points to limited overlap.

Only 38% believe BNPL use cannibalizes private-label credit use, and 35% believe the two attract the same consumer segments.² While four in ten said consumers rarely use both because they tend to favor one.²

Since experiences vary by merchant, it helps to measure rather than assume. Tracking BNPL adoption alongside private-label credit usage, with conversion, average order value, and repeat purchase, can show whether BNPL is adding demand or shifting existing spend.

What business value can payment flexibility support?

Recent survey results suggest flexible financing can support larger baskets and repeat purchasing among eligible shoppers. 75% of consumers feel more confident buying higher-ticket items when installment options are available at an enterprise merchant.³

PayPal internal data reports a 90% approval rate,⁴ a 95% repeat-purchase rate,⁵ and a 93% increase in average order value for Pay Later.⁶ Together, these metrics suggest that flexible financing can help support larger purchases while encouraging repeat business. More broadly, 55% of PayPal users abandoned purchases when PayPal was not offered, underscoring the cost of narrowing the checkout stack.⁷

Availability, then, is one factor enterprise teams may want to consider alongside adoption, cost, and checkout experience. Implementation matters as well. Presenting financing within the existing flow can reduce the need for parallel customer journeys and separate operational processes.

How should enterprise buyers evaluate the cost of BNPL?

Provider fees are only one input. Buying teams should also weigh integration effort, ongoing maintenance, and the balance of incremental volume versus shifted spend.

Forrester's research found that cost is the top factor merchants weigh when selecting a BNPL option, followed by conversion impact and the consumer experience at checkout.⁸ For an enterprise team already running private-label credit, the more consequential cost usually sits outside the fee schedule. Running disconnected financing systems can create duplicate reporting, inconsistent checkout experiences, and no single way to decide when each financing option shows up.

What should enterprise buyers look for in a BNPL provider?

To separate a BNPL provider that fits into an enterprise financing mix from one that adds a second, disconnected system, consider the following:

• One integration across the checkout stack rather than a parallel build
• Approval and repeat-purchase performance at enterprise scale
• Support for higher-ticket purchases without discounting margin away

PayPal Pay Later addresses several of these criteria through integration with the PayPal checkout stack, all unified on PayPal rails. Its two-sided network also supports approval and repeat-purchase performance at enterprise scale.

How PayPal Pay Later fits into your financing mix

PayPal Pay Later is built to sit alongside your existing financing programs, not replace them. A few specifics:

• Available across ten markets, with upstream presentment so eligible shoppers see Pay Later before they even reach checkout.
• A dedicated Pay Later second button gives shoppers a clear, separate path to installment payment without disrupting your primary checkout button.
• 0% APR merchant-funded buydowns (available in the US and Germany) help remove interest as a barrier on higher-ticket purchases.⁹
• One integration connects Pay Later, PLCC acceptance, and the rest of your checkout stack, so your team isn't maintaining separate systems for separate financing options.

Enterprise merchants already using Pay Later see 90M+ pre-approved account holders¹⁰ with a 90% approval rate,⁴ plus gains in AOV and repeat purchases.

How should enterprise merchants think about their financing mix?

Merchants should evaluate BNPL as an addition to the financing portfolio rather than as a replacement for private-label credit. Private-label credit reinforces loyalty among existing customers while BNPL's flexibility supports conversion among new and price-sensitive shoppers. These distinctions, drawn from Forrester's research, give payments, finance, and E-commerce leaders a clearer basis for deciding where BNPL fits.

See how PayPal Pay Later Solutions can fit into your checkout strategy, and discover more findings in Forrester's Merchant Perspective on BNPL and PLCC Consumers.