BNPL: from conversion rate highs to fraud attack lows – insights from myToys Group

Tuesday 12 April 2022 08:59 CET | Editor: Raluca Constantinescu | Interview

Monique Paulsen, Project Manager Payments at myToys Group, elaborates on the European BNPL landscape, from factors driving this trend to the pros and cons of BNPL options

Buy Now, Pay Later (BNPL) seems to be enjoying growing popularity among consumers in certain markets. What are some of the factors driving this trend, and how will it impact shopping behaviour? 

Indeed, the response depends heavily on individual markets. In Scandinavia and the German-speaking market, BNPL has been a dominant payment method for more than a decade, and the market share or popularity has not changed that much. 

As BNPL providers' valuations have exploded, they have also launched massive B2B and B2C communications campaigns in the countries where they offer their services. In regions where BNPL products previously had little or no market share, we are seeing strong growth, while overall market share is still limited. 

In my opinion, BNPL providers are acquiring merchants by causing fear of missing out. When it comes to shopping behaviours, now that more and more companies are offering and promoting BNPL, consumers are starting to feel the benefits. Therefore, I expect that the new BNPL stores will see an increase in their return rates because consumers will order more products. 

Can you elaborate on the BNPL options that are available to merchants and their main advantages and disadvantages? 

Direct debit, where the bank account is automatically debited a couple of days after the purchase, is probably the least relevant BNPL method, as direct debit is not very common outside of the German-speaking market. A clear advantage for merchants and consumers is that, in this case, the entire process is fully automated. 

Payment in instalments is slightly more important, and it is very attractive for merchants with higher basket values, as some consumers will only be able to purchase their products when such payment options are offered. Merchants and BNPL providers may benefit from the interest rates which are to be paid by the consumers, and some financially inexperienced consumers may even be threatened by over-indebtedness. 

By far, the most relevant BNPL method is payment by invoice, where the due date of the payment is deferred to 14-30 days after the purchase. Consumers do not have to insert any financial data online, and lack of trust in unknown online shops is not an issue as the goods only have to be paid once they have been received. In the case of consumers returning goods, they only need to pay for what they decide to keep. The checkout conversion rates usually see a massive increase when this BNPL option is available. 

However, in all BNPL types, merchants incur the risk of bad debts, which arise from inadequate creditworthiness of customers or from fraud. The use of stolen or fake identities is particularly common. Unfortunately, account takeovers are also on the rise. 

What did myToys Group notice in terms of acceptance rates and average basket value after offering BNPL at the checkout? 

Since we have always offered BNPL, we can only refer to our A/B tests. In our A/B tests, we see that the conversion rate is about eight times higher when BNPL payment methods are offered to our customers – especially payment by invoice, which is still one of the most important payment methods for our customers. However, this cannot be generalised, as our product range and target group (families) are somewhat different from general marketplaces or merchants that mainly sell electronic devices, for example. 

With instalment payments, the average basket value is higher than with any other payment method. 

In your opinion, how long will it be until regulators will expand or create new rules for the BNPL space, and how will this move impact BNPL products? 

It seems that regulators in many countries have already started to take a look at the BNPL space. One of the reasons behind it is that younger consumers in particular do not seem to be fully aware of the consequences of over-indebtedness, which can easily be caused by BNPL products. Rising defaults seem to change how some BNPL markets leaders structure their products to have a headstart before any future regulation kicks in – or to avoid such regulation altogether. In my opinion, it will be a matter of a maximum of three years until we will see a consumer protection-focussed EU. 

Can you please share some best practices or pointers for merchants that consider adding BNPL at the checkout? 

Since we handle BNPL ourselves via invoice and direct debit, I can say that merchants should offer these payment methods to as many good customers as possible. To avoid defaults, it is important to implement a credit check already on the checkout page, but also to carry out fraud prevention afterwards. Despite the countless system solutions available on the market, we have noticed that manual prevention is indispensable. And this must be very adaptable because the customers – or rather the fraudsters – are too. 

Whenever a merchant considers working with a BNPL provider, they should check the following: 

  1. ease of technical integration 

  2. pricing 

  3. payout to merchant 

  4. what acceptance rates can be expected – and whether these can be guaranteed. 

During E-commerce Berlin Expo, you’ll be speaking on the topic of ‘BNPL – secret sauce or historic hype?’. What is the key takeaway for your audience at the event? 

As we’ve seen, BPNL or ‘Rechnungskauf’ is currently one of the hottest topics in ecommerce. Companies like Klarna, AfterPay, Affirm, and others are valued at billions – but what do they have in store for merchants and their customers? Does Snoop Dogg add the necessary swag to a business or is he about to become just another gatekeeper in ecommerce? By offering BNPL at our own risk for ages now for myToys Group’s online shops (including,,, and having offered instalments both with and without service providers, we aim to provide our audience with a comprehensive overview of the BNPL space, from conversion rate highs to fraud attack lows, through service provider pitch loopings and free falls, into the hard reality of customer experience and acceptance rates. 

About Monique Paulsen 

Monique has been working in ecommerce for more than a decade. As a member of the logistics and clients service departments, she got to know some of the most relevant parts of ecommerce before becoming a payment and fraud professional. In 2013, she delved further into the fraud and payment world as a project manager for fraud prevention, and she is now responsible for the entire payment project management at myToys Group. Since October 2020, Monique is leading the fraud prevention team for myToys Group. 

About myToys Group 

myToys Group is the leading platform for family shopping in Germany. Under the myToys brand, the group has been operating the no. 1 online shop for toys and products for children in Germany since 1999, as well as 19 physical shops. Since 2013, the online shoe shop mirapodo and the shopping club limango have been part of the brand family as well. In 2016, the home and living shop yomonda went live online. The myToys Group is an Otto Group company and currently employs over 2,000 people. 

About E-commerce Berlin Expo
Every single year, this pure-play ecommerce event attracts more than 10,000 international visitors and over 200 exhibitors. On 5 May, more than 50 speakers gather in Berlin to share their industry knowledge, and the event has already established itself as a central meeting point for ecommerce communities, decision makers, and innovative retailers. For the seventh edition of E-commerce Berlin Expo, participation in the conference is free of charge, but all people willing to participate are required to pre-register on the official website of the event. Get your free ticket here! 

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Keywords: BNPL, shopping, payment methods, merchants, instalment payments, regulation
Companies: myToys Group
Countries: Europe

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