A Guide to Pay Later for Luxury Clothing and Fashion Retailers

Pay later solutions allow fashion retailers to offer installment payments at checkout, enabling customers to spread the cost of high-value purchases over time.

As premium fashion continues to grow online, payment strategy has become a critical driver of conversion, average order value (AOV), and customer experience. For retailers selling designer pieces, runway collections, and limited-edition items, buy now, pay later (BNPL) is no longer a mass-market tactic. It’s a strategic capability that can elevate the entire purchasing journey.

The right pay later solution reduces friction for high-consideration purchases, supports higher basket sizes, and preserves the brand consistency and trust your clientele expects.

This guide explains how pay later works in high-end fashion retail, the different BNPL models available, and what decision-makers should consider when choosing the right solution.

What is pay later in fashion retail?

Pay later, also known as buy now, pay later (BNPL), allows customers to split the cost of their purchase into multiple scheduled payments instead of paying the full amount upfront.

In fashion ecommerce, pay later is typically offered directly at checkout, presented alongside cards and digital wallets, structured as monthly or bi-weekly installments, and priced the same as paying upfront.

For retailers selling luxury items, pay later isn’t about discounting or making products more “affordable.” It’s about removing unnecessary payment friction while maintaining the sophisticated experience your customers expect when purchasing a £2,000 coat or a limited-edition handbag.

How pay later works for fashion retailers

A typical pay later checkout flow works like this: a customer selects items and proceeds to checkout, a pay later option appears alongside existing payment methods, the customer selects an installment plan, and the transaction is completed.

Where BNPL providers differ is in approval requirements, checkout flow, data ownership, and risk management. Understanding these differences is essential for retailers who need to protect their brand experience at every touchpoint, particularly when a customer is about to complete a significant purchase.

Finance-based buy now, pay later

Finance-based BNPL requires customers to apply for new credit at checkout. This model often involves redirecting customers to a third-party platform, collecting personal or financial information, running a credit check, and potentially charging interest or late fees.

When someone is purchasing a piece from your new collection, the last thing they want is to be redirected to another site, asked for their Social Security Number, and made to wait while their application is assessed. This friction can feel jarring, particularly for customers who are accustomed to a seamless, discreet purchasing experience.

These providers also typically see approval rates of around 30-40%, meaning a significant portion of customers who want to use installments are declined at the final moment.

Card-linked installments

Card-linked installments offer an alternative approach. Customers use their existing credit card to split payments into smaller monthly amounts. There’s no new credit application, no additional credit check, and no redirection away from your site.

With card-linked BNPL, customers enter their card details directly at checkout, select their preferred number of installments, and complete the purchase. They need to have the full balance available on their card at the time of purchase, but they’re only charged for the first installment. The remaining payments are charged automatically each month.

This model appeals to affluent shoppers who value their existing credit card relationships. These are customers who have premium cards, earn substantial rewards, and expect to continue benefiting from their card’s purchase protection and points when buying a designer piece.

Splitit is a card-linked installment provider that enables customers to pay over time using the credit they’ve already earned. With approval rates of 85% and above and average order values exceeding $1,000, this approach is well-suited for high-end fashion, fine jewelry, and other significant purchases. 

Benefits of pay later for high-end fashion retailers

Higher conversion rates

Customers are more likely to complete a purchase when installment payments are available, particularly for high-consideration items where the decision to buy involves more deliberation.

Card-linked installments take this further by removing application friction entirely. There’s no credit check, no waiting period, and no risk of decline for customers who have available credit. When someone has decided to purchase a £3,500 jacket, the checkout experience should confirm that decision, not create doubt.

Increased average order value

Pay later increases AOV by making premium purchases feel more manageable, without discounting.

This is especially true for card-linked BNPL. US cardholders typically have tens of thousands of dollars in available credit on their cards, giving them significant purchasing power when flexible payment terms are available. Customers feel more comfortable adding complementary pieces: the matching accessories, the second colourway, the item they were hesitating on.

Splitit merchants report average order values above $1,000, significantly higher than typical finance-based BNPL transactions. For retailers selling designer and premium items, this represents a meaningful opportunity to grow basket sizes while serving customer preferences.

A premium customer experience

Your clientele expects a seamless checkout, brand consistency, and discretion. The payment experience should reflect the same quality and attention to detail as the products themselves.

Traditional BNPL providers often redirect customers to third-party sites, display their own branding prominently, and collect customer data for their own marketing purposes. Some even build marketplaces that recommend competing retailers to your customers, directing someone who just browsed your site toward a lower-priced alternative.

White-label, card-linked solutions keep customers on-site, maintain your brand’s presence throughout the journey, and avoid third-party interference. When you’ve invested in creating a distinctive brand experience, the final step of the purchase shouldn’t feel like it belongs to someone else.

High-end reseller Vestiaire Collective uses Splitit to promote circularity and sustainable shopping. With Splitit at checkout, their customers can access traditionally exclusive products through a flexible way to split the cost into multiple payments, all while the brand maintains full control of the experience.

Access to an affluent customer segment

Card-linked installments attract a different customer profile than traditional BNPL. These are typically shoppers with FICO scores of 700 and above who have substantial available credit and prefer to use their existing financial tools.

Higher-income consumers tend to prefer using credit cards over traditional BNPL. These are customers who aren’t looking to take on new debt or undergo credit checks. They have premium cards, they value their rewards and benefits, and they want flexibility within the financial relationships they’ve already established.

By offering card-linked installments, fashion retailers can capture this segment. These are customers who might otherwise pay in full, hesitate on larger purchases, or choose a competitor with more flexible payment options.

No new debt for customers

Card-linked pay later doesn’t require customers to open new credit accounts. They use the credit they’ve already been approved for, which appeals to discerning shoppers who prefer not to undergo credit checks, want flexibility without new financial commitments, and value control over their existing resources.

This responsible approach aligns with the expectations of customers who want financial flexibility without compromising their credit profile or taking on obligations beyond their existing card relationship.

What to look for in a BNPL provider

Platform compatibility and scalability

When evaluating BNPL, consider compatibility with your ecommerce platform, speed and simplicity of implementation, ongoing technical and operational support, and ability to scale across regions or brands.

Look for providers that offer flexible integration options, from simple plug-ins for major platforms to custom API integration for more complex requirements. The right partner should support your growth without creating operational complexity.

Brand experience and customer journey control

For retailers where brand perception matters, control at checkout is non-negotiable. Evaluate whether the solution can be white-labelled under your brand, whether customers stay on your site throughout the payment process, whether the provider collects and uses customer data for their own marketing, and whether the checkout experience matches the feel of your brand.

Splitit’s white-label approach puts the merchant’s brand front and centre, with no third-party logos, no data harvesting, and no remarketing to your customers.

Cost and commercial impact

BNPL pricing models vary but may include platform or subscription fees and transaction-based commissions.

Finance and ecommerce teams should evaluate conversion uplift, AOV growth, and impact on customer lifetime value. For many fashion and retail businesses, the incremental revenue generated by pay later outweighs the operational cost, particularly when approval rates and average order values are significantly higher than traditional BNPL alternatives.

Customer expectations and alignment

Consider what your customers are looking for. Do they prefer flexibility without taking on new financing? Is brand control at checkout essential to your positioning? Are fees, penalties, or credit checks likely to create friction?

Card-linked BNPL aligns well with affluent audiences seeking choice without complexity. These customers want to use their existing credit cards, earn their rewards, and enjoy a seamless experience that matches their expectations.

Optimising pay later after launch

Pay later should be treated as a performance channel, not a static payment option.

Best practices include monitoring conversion and AOV by payment method, testing installment messaging on product and category pages, aligning pay later visibility with seasonal launches and new collection drops, and using white-label messaging across onsite and CRM channels.

Consider highlighting flexible payment options throughout the customer journey, on product pages, in email marketing, and across your website. For a customer considering a significant purchase, knowing they can spread the cost may be the detail that moves them from browsing to buying.

How Splitit supports luxury fashion retailers

Splitit enables fashion and jewelry retailers to offer buy now, pay later using customers’ existing credit cards, without new credit applications, credit checks, or off-site redirection.

With Splitit, merchants can increase conversion through a frictionless checkout experience, drive higher average order values by appealing to customers with substantial available credit, and maintain a premium, on-brand experience with full white-label capabilities.

Splitit integrates with major ecommerce platforms and offers flexible implementation options to suit businesses of different sizes and requirements. Get in touch to learn how Splitit can support your business.