BNPL Strategies for Merchants Expanding in Emerging Markets

The pace of change in eCommerce is most visible across emerging markets. For merchants expanding across Africa & the Middle East, Asia and Latin America, growth depends on more than product or price. It depends on offering the right way to pay. Cards still hold weight, but real momentum lies with alternative payment methods (APMs).

Among these, Buy Now, Pay Later (BNPL) has become one of the most effective tools for conversion and customer acquisition. What began as a niche product has turned into a core strategy that helps reach new audiences and drive measurable results. This blog looks at why BNPL adoption is accelerating in emerging markets and how merchants can apply it effectively.

Why BNPL is growing in emerging markets

The BNPL increase isn't accidental, it's a deliberate response to deep-seated structural forces within these economies. For merchants, understanding these forces is crucial to grasping the opportunity available.

• Unmet credit demand in underbanked populations: Across emerging markets, large populations remain disconnected from traditional banking systems and credit card access. Card penetration remains below 40% in most of these markets, leaving millions without access to formal credit. Even among those who do have cards, credit limits are often low, which makes them equally strong candidates for BNPL. The result is a clear gap between consumer aspirations and buying power. BNPL bridges this gap, providing accessible, short-term financing without the complex processes of conventional credit applications. It's a practical solution for digitally-ready consumers previously excluded by older financial systems.
• A digitally-native generation takes center stage: The demographic shift in these regions is notable. A mobile-first generation, mostly Gen Z and millennials, is gaining economic influence. With billions of smartphone users, this group lives within digital ecosystems. They adopt innovative financial tools while rejecting traditional credit card debt models. As their economic influence expands across emerging markets, their need for flexible, clear payment mechanisms will greatly intensify.
• Preference for local and flexible methods: Cash, bank transfers, and local eWallets are the dominant payment methods across many countries. Modern BNPL platforms excel by integrating with these non-card repayment channels. This adaptability positions BNPL as a natural continuation of existing payment ecosystems, allowing installment purchases through familiar, trusted methods.
• Purchase facilitation and affordability design: BNPL fundamentally alters purchase psychology. By breaking down large expenses into manageable installments, it aligns with typical cash flow patterns while removing psychological price barriers. This directly influences buying behavior, helping customers acquire desired products without jeopardizing financial stability.

From payment option to performance driver

BNPL integration goes beyond customer accommodation, it delivers measurable business acceleration. The effects across business KPIs are substantial and immediate:

• Conversion Rate Optimization (CRO) and cart abandonment reduction: Payment friction is a primary cause of cart abandonment. When customers find missing payment options or intimidating total costs at checkout, leaving becomes certain. Research shows that without flexible payment alternatives, cart abandonment rates rise significantly. BNPL implementation helps reduce this friction, leading to conversion rate improvements reaching 40%.
• Activating previously unreached customer segments: BNPL accesses latent demand from large customer pools previously kept out by traditional credit barriers. For international merchants, this represents a major shift, providing direct access to bigger, more varied audiences in markets where credit card usage remains minimal.
• Average Order Value (AOV) amplification: Payments distributed over time change purchase decisions. A $400 purchase becomes a $100 commitment when split across four installments. This mental reframing encourages adding more items to the cart and selecting premium products, driving AOV growth of up to 40% in some emerging markets.
• Liquidity improvement and risk management: A common misunderstanding suggests BNPL exposes merchants to credit risk and cash flow delays. Reality proves otherwise. Customer purchases trigger immediate, full payment from BNPL providers to merchants.

This model guarantees prompt cash inflows while shifting all consumer credit and fraud risk to specialized providers, protecting merchant profitability.

The hidden details of BNPL implementation

While the advantages are compelling, putting BNPL into practice across multiple emerging markets presents significant operational challenges. Success requires carefully addressing these complexities.

The ecosystem shows extreme fragmentation, with dozens of local and regional BNPL providers, each requiring distinct technical integrations, processes, and settlement procedures. Managing these relationships individually creates considerable operational burden. Additionally, many solutions use redirect-based checkout flows that disrupt user experiences and reduce conversion rates.

At the same time, maintaining optimal approval rates without fraud exposure requires precise adjustment. The regulatory environment continues to change, with authorities adding more compliance difficulty for merchants.

Offering installments at checkout doesn’t just feel customer-friendly, it consistently moves the conversion needle.

A 4-step strategy for effective BNPL integration

Mastering these challenges requires strategic execution. Here's a framework for maximizing BNPL effectiveness in emerging markets:

1. Design smooth checkout experiences

BNPL integration should feel effortless. This calls for embedded checkout solutions that keep customers engaged on the site. Features like eWallet linking and simplified input interfaces minimize points of friction. To improve authorization rates without adding obstacles, prioritize partners that employ advanced techniques, like pre-approvals for recognized users, and data enrichment for intelligent, quick decision-making.

2. Go beyond credit card repayment limitations

Maximizing reach needs supporting locally-dominant repayment channels. This means moving past card-based installments to include bank transfers, cash-based options like Mexico’s OXXO, eWallets, and real-time payment systems like Brazil's PIX. This adaptability ensures customer engagement through preferred channels.

3. Consolidate operational complexity

Managing individual BNPL integrations across multiple countries leads to inefficiency and is not sustainable. Success requires simplifying operations through unified integration approaches. BNPL aggregators (such as dLocal’s BNPL Fuse) offer single orchestration layers that manage providers and operations across emerging markets. This strategy lets teams focus on growth instead of managing connections.

4. Use local market intelligence

Success in emerging markets demands comprehensive local knowledge. Partnering with payment providers that have established networks and a deep understanding of the market proves very valuable. These secure favorable provider terms while ensuring the payment stack aligns with consumer behavior, regulatory requirements, and competitive dynamics across specific countries.

Preparing your business for future growth

BNPL has progressed beyond being a peripheral payment method, it's now a vital part of modern, growth-focused eCommerce strategies, particularly across emerging markets. It directly addresses fundamental consumer needs for affordability, flexibility, and access while delivering measurable business results through improved conversion, higher order values, and expanded customer acquisition.

Putting it into practice effectively calls for strategic methods that balance positive user experiences with strong operational management. As BNPL adoption picks up globally, forward-thinking merchants must consider how this powerful payment tool fits with their international expansion goals.

Read more/contact us

To go further, our Emerging Markets Payments Handbook 2025 unpacks consumer behavior, local payment rails, and the trends shaping global eCommerce growth. Ready to unlock growth in emerging markets with a refined BNPL strategy? Connect with our team.

About dLocal

dLocal powers local payments in emerging markets, connecting global enterprise merchants with billions of emerging market consumers across APAC, the Middle East, Latin America, and Africa. Through the “One dLocal” concept (one direct API, one platform, and one contract), global companies can accept payments, send payouts, and settle funds globally without the need to manage multiple local entities and integrations. For more information, visit www.dlocal.com