When BNPL Falls Short, Lease-to-own Closes the Gap

Flexible payment options have quickly shifted from a competitive advantage to a standard expectation at checkout.

Buy Now, Pay Later (BNPL) has played a major role in that evolution. By allowing customers to split purchases into smaller, predictable payments, BNPL has made it easier for shoppers to move forward with purchases across both online and in-store environments. Adoption continues to grow, particularly among younger consumers who value flexibility and control over how they pay.

Nearly one-third of U.S. consumers have used BNPL¹

For merchants, this reinforces a clear reality: customers expect options. However, while BNPL has expanded access to flexible payments, it does not always cover the full cart, particularly as cart sizes increase.

Where BNPL works and where gaps emerge

BNPL solutions typically support purchases through two structures.

• Split-pay options, such as “Pay in 4,” are widely used for smaller, everyday purchases. These short-term plans are simple and well-suited for lower cart values.

• Longer-term installment loans support higher-ticket transactions. These options extend repayment periods and offer higher approval amounts.

However, as purchase size increases, the dynamics begin to change. While installment loans are designed for larger purchases, most non-prime consumers don’t qualify or don’t qualify for enough to cover their purchase. This is where gaps can emerge at checkout.

In these moments, the issue is not demand. The customer is ready to buy. What is missing is a payment option that aligns with both the purchase amount and the customer’s financial profile.

The checkout coverage gap

Even with multiple financing options, some customers cannot complete their purchase, especially for higher-ticket items where approval rates and high approval amounts matter more.

32% of consumers say higher spending limits would make BNPL more useful²

When that gap exists, transactions that might otherwise convert can stall at the final step. Many merchants focus on driving more traffic when conversion drops. But often, the opportunity sits at checkout. Customers are already there. The gap is simply that no available payment option fully supports their needs.

A missed opportunity at checkout

When transactions fall through, it is easy to assume consumers are sensitive to price. In reality, the friction often comes down to payment accessibility across different customer segments. BNPL has expanded access to flexible payments, including through installment loans. But for higher-ticket purchases, these options do not always extend to customers outside prime or near-prime credit profiles.

Consider a $2,000 purchase. A customer may qualify for smaller purchases using BNPL, but not meet the criteria for a higher-value installment loan. Without another option, the purchase can stall, even when intent remains high. Providing an additional path to pay allows that same customer to complete the transaction.

Extending coverage with lease-to-own

Lease-to-own helps extend checkout coverage by supporting larger purchases and a broader range of customers.

Rather than replacing BNPL, it works alongside it. While BNPL installment loans serve customers who qualify for traditional credit-based financing, lease-to-own supports those who may fall outside those requirements, particularly non-prime customers. This added flexibility helps ensure more customers can complete their purchase, especially at higher price points.

A more complete payment strategy

BNPL and lease-to-own each play a distinct role:

• Split-pay BNPL supports smaller, everyday purchases

• Installment loans extend into higher price points for prime and near-prime customers

• Lease-to-own bridges the remaining gap by expanding access and supporting larger transactions

Together, these options create a more complete payment strategy, helping merchants better serve a wider range of customers and purchase scenarios.

Capture more of the demand you already have

The opportunity is not just to offer more payment options, but to ensure those options fully cover customer needs across both purchase size and credit profile.

By extending checkout coverage with lease-to-own, merchants can convert more high-intent shoppers, particularly in scenarios where installment loans may fall short.

The most effective checkout experiences are not defined by a single solution, but by how well multiple options work together to support real customer behavior.

Contact us to see how Koalafi complements your existing payment options

¹ Bankrate - Survey: About half of buy now, pay later users have experienced issues like overspending and missing payments

² PYMNTS - 1 in 4 BNPL Users Would Like Providers to Lower Fees