Create and use a pre-approval application

Buy Now, Pay Later (BNPL) is a type of short-term financing that allows consumers to split their purchase into installments by financing the amount through a financial institution—while you, as the merchant, receive the full payment upfront.

Customer approval for BNPL depends on several factors, such as credit history, existing derogatory marks, and overall creditworthiness. These variables can lead to a high denial rate or result in customers being approved for an amount lower than the total they’re trying to finance.

To help address these challenges, the BNPL Applications screen provides visibility into customer pre-approval statuses. Here, you can view all submitted pre-approval applications, including whether they were approved or denied. If pre-approved, you’ll also see the maximum amount the customer is eligible to finance—helping you align checkout options with their actual buying power and reduce denial rates. 

Note that checking the BNPL pre-approval status will not affect the customer’s credit score. It is a soft inquiry used only to assess eligibility and spending limit.

How to create a pre-approval application

1. Navigate to the BNPL Applications screen from the side navigation menu.

2. Click the View Application Code button located in the top right corner of the screen. A popup will open displaying a QR code that customers can scan. This code is unique and never changes, so as a best practice, you may want to print it and keep it accessible in your office for easy scanning when a customer arrives.

3. After scanning the QR code, the customer will be redirected to the financial institution’s page to enter their information and submit the pre-approval application. 

4. Once the customer submits the application, it will appear in the BNPL Applications screen with a status of either Pre-Approved (including the maximum approval amount) or Denied.

How to use a pre-approved application

If the customer was pre-approved, it means a certain amount is eligible for financing—based on several factors evaluated during the pre-approval process. You can click View Details on the right side of the row to see the maximum amount the customer was approved for.

1. Click the ellipsis menu on the right side of the row and select Pay on Virtual Terminal.

2. You will be redirected to the New Payment screen with the BNPL payment method selected. The form will be pre-filled with the customer’s information from the pre-approved application. You can adjust fields like the payment amount and other data if needed.

3. Complete the remaining steps to process the payment through the virtual terminal as you normally would.

4. After submission, the customer will receive a link—just like with any BNPL application—allowing them to complete the usual steps: choose financing terms, review available rates, and finalize the agreement. For more details on this process, refer to this article.

Do not submit a payment—including taxes—that exceeds the pre-approved amount, as this will result in a Denial.