By Andy Smith, CEO at Snap Finance UK
As e-commerce continues to transform the retail sector, digital payments are evolving just as rapidly. One of the most impactful advancements is the rise of flexible finance, including Buy Now Pay Later (BNPL) services and a variety of flexible payment plans – allowing greater freedom in how and when consumers pay.
Tailored solutions
In the UK, half of adults have used BNPL, with usage highest among people aged 28-43, followed by those aged 18-27*. This surge highlights a generational shift in financial behaviour, as consumers increasingly turn to flexible finance tools as a strategic way to manage their budgets and make higher-value purchases more accessible.
When customers have access to clear comparisons of financial options, adjustable loan terms, and spending limits set according to their current financial situation, they are more inclined to confidently make high-value purchases both online and in-store.
Embedded finance
A combined focus of inclusion and flexibility reduces cart abandonment, particularly on high-value purchases, and enables retailers to attract a broader and more diverse customer base. As a result, retailers benefit from increased conversion rates and stronger customer engagement.
Flexible payment options can also influence shopper behaviour. When customers have the option to pay over time, they are more likely to select quality products which lead to more sustainable buying decisions. Our customer research also tells us that being able to pay in instalments is often beneficial for handling unexpected, necessary expenses.
Integration is key
When retailers integrate a lender application directly into the online journey, it gives shoppers an opportunity to access finance without leaving the checkout and starting over. This reduces dropout, keeps them engaged, and helps maintain momentum in the buying process.
By offering a straightforward application process, seamlessly integrated with retailers’ e-commerce platforms, shoppers can experience a more frictionless shopping experience. Streamlined digital payment options give consumers more choice and control over their purchases, increasing customer satisfaction and the chance of repeat business.
Our own experience in the UK market shows that offering both 0% and interest-bearing credit in a single journey can significantly improve customer outcomes. Since launching the SnapFlex model, we’ve seen double-digit growth in conversion (+12.6%), approval rates (+15.4%), and completed purchases (+13.9%). These improvements stem from our strategic shift to personalised, individual-level pricing, which ensures consumers previously overlooked or inaccurately priced by traditional lenders have access to finance solutions precisely matched to their financial circumstances.
This is especially evident in verticals like home furnishings and consumer tech, where the ability to pay over time can turn browsers into buyers. By making these products more attainable, flexible payment plans help drive revenue growth for online retailers.
Financial inclusion at the point of sale
Access to credit remains a major challenge in the UK, particularly for younger consumers or those with thin credit files. According to Experian, over 5 million people in the UK are “credit invisible”, meaning they lack enough credit history to access traditional finance products.**
Unlike traditional credit applications that rely heavily on strong credit scores, lenders offering more inclusive approval processes can help retailers reach a broader customer base.
By shifting the focus from legacy credit scores to real-time affordability assessments, lenders can open responsible access to credit for a wider population. This is especially valuable, but not limited to, targeting Gen Z, born between 1997 and 2012, who often have limited credit histories but still expect seamless, transparent access to quality products.
Gen Z consumers also prioritise transparency, speed and control. They expect frictionless online journeys, clear repayment terms, and zero hidden fees. Retailers who meet these expectations can build long-term trust with a generation that is just entering peak earning years.
The next phase of digital payments
Flexible payment solutions aren’t just changing how people buy, they’re changing who gets to buy. Options like Pay in 4, 0% finance, and risk-adjusted pricing models help break down large purchases into manageable chunks, promoting smarter budgeting and reducing financial strain. And with new regulation on the horizon from the FCA, the BNPL market will need to become more transparent and consumer-protective, which should be embraced as it helps ensure it grows in a sustainable way.
With UK consumers increasingly expecting flexible finance options at checkout, embedded finance is no longer a differentiator – it’s a necessity. Retailers and lenders that offer inclusive, accessible credit options stand to gain not just higher sales, but stronger, longer-term relationships with customers.
By focusing on affordability, transparency, and integration, flexible finance can unlock a more inclusive future for UK retail and digital payments alike.
Sources:
* https://www.finder.com/uk/buy-now-pay-later/buy-now-pay-later-statistics
** https://www.experian.co.uk/assets/consumer-credit-risk/making-the-invisible-visible.pdf
