High BNPL fees can cut into your profits quickly. Affirm’s merchant fees often range from 2% to 6%, depending on your business type and setup. For stores with tight margins, that’s a lot to give up per sale. But there are other BNPL options with lower fees that can help you keep more of what you earn while still managing dispute risks.
Why Compare BNPL Fees?
Affirm is popular for its instant approvals and clear payment plans. But its fees can reach up to 6% plus a fixed charge per transaction. For businesses selling big-ticket items or products with thin margins, those fees add up fast.
Switching to a lower-fee BNPL provider can help you:
- Keep more profit from each sale
- Reduce overall payment processing costs
- Offer flexible payments without losing too much to fees
Here are a few BNPL alternatives that often have lower merchant fees than Affirm.
1. PayPal Pay Later
Average Fees: Around 1.9% to 3.5% plus a fixed fee per transaction.
PayPal Pay Later lets customers split payments into 4 installments or choose longer-term financing. It uses your existing PayPal checkout, making integration easier. Many merchants report lower fees compared to Affirm, especially if they already have negotiated PayPal rates.
2. Afterpay
Average Fees: About 4% to 6%.
Afterpay’s fees can sometimes match Affirm’s higher range, but merchants often see effective rates closer to 4%, depending on their sales volume. Afterpay pays you upfront and takes on repayment risk, which helps with cash flow.
3. Sezzle
Average Fees: Usually between 3% and 6%, with room to negotiate lower rates for higher volumes.
Sezzle lets customers split payments without extra cost to them. Merchants pay the processing fee, which varies by agreement. For stores with large BNPL sales, Sezzle fees can come out lower than Affirm’s in many cases.
4. Klarna
Average Fees: Around 3% to 5.99%.
Klarna offers different payment options, from Pay in 4 to longer financing plans. While their top rates can match Affirm’s, merchants often pay closer to 3% to 4% once volume discounts are applied.
5. Zip (Quadpay)
Average Fees: Roughly 4% to 6%.
Zip lets customers pay in 4 installments over 6 weeks. Its fees are similar to Afterpay, but some mid-sized merchants report slightly lower rates compared to Affirm. Zip works with most e-commerce platforms for easy setup.
Do Lower Fees Affect Chargeback Risk?
BNPL providers like Affirm, Afterpay, and Klarna pay you upfront and handle repayments, which reduces your exposure to traditional chargebacks. But disputes can still happen if:
- Orders are not fulfilled
- Products arrive damaged or differ from what was described
- Fraud or unauthorized use occurs
A lower fee does not mean you will see more chargebacks. Providers with strong fraud screening, such as PayPal Pay Later and Klarna, often have similar dispute rates to Affirm. Always review how each provider handles disputes before switching.
Final Thoughts
Affirm works well for many stores, but it is not the only BNPL choice out there. Looking at other providers like PayPal Pay Later, Klarna, and Sezzle can cut your fees while giving customers flexible payment options. Check their integration process, approval rates, and dispute handling to find the right fit for your store.
FAQ: Affirm Alternatives with Lower Merchant Fees
What are Affirm’s merchant fees?
Affirm charges merchants anywhere from 2% to 6% per transaction, depending on your business type and setup. Fees can also include a fixed transaction charge.
Which BNPL provider usually has the lowest merchant fees?
PayPal Pay Later often offers the lowest fees, usually between 1.9% and 3.5% plus a fixed fee. Exact rates depend on your PayPal merchant agreement.
Do BNPL providers increase chargeback risks?
BNPL providers take on repayment risk and pay you upfront, which reduces your exposure to traditional chargebacks. However, disputes can still happen due to fraud, fulfillment issues, or product problems.
Can I use multiple BNPL providers on my store?
Yes. Many merchants offer more than one BNPL option to give customers more choice and to negotiate better rates with each provider.
Will switching from Affirm to a lower-fee BNPL affect approval rates?
Approval rates depend on each provider’s underwriting rules. Testing alternatives on a portion of your traffic helps compare approval rates and conversions before making a full switch.
Keep Your BNPL Sales Safe from Chargebacks
Chargebacks can take away the gains you make with BNPL. Chargeblast helps you fight chargebacks with automated responses, real-time alerts, and smart strategies for each provider. Protect your profits while giving your customers the payment flexibility they want.
Book a demo today to see how simple chargeback prevention can be.
