Breaking Down the Cost of Developing BNPL App Like Afterpay

Tech savvy consumers especially Gen Z and Millennials prefer convenient and interest-free payment options. A research study states that the global market size of buy now pay later market is projected to grow from 30.19 billion USD to 167.58 billion USD by 2032. 

So, this becomes an opportunity for consumers to make online purchases with no financial burden. At the same time, retailers can increase their sales by giving consumers the option to buy goods now and pay for them later. 

Companies like Affirm are taking the front seat in the fintech space as it appeals to the growing interests of retailers and consumers. It has competed with traditional credit card debt and experiences strong growth because of changing consumer habits and their inclination to spend more on these apps. 

But building a buy now pay later app requires a significant investment. Let’s learn about the cost and factors affecting the BNPL app development. 

What are the factors that affect the After-pay app development cost?

To give you a rough estimate, the cost of creating a secure BNPL app can go around $40,000-$250,000. Here are some factors that affect the cost of developing a BNPL app like After pay: 

1. Choice of App Development 

When creating a buy now pay later application, you should research your target audience. Are there more Android users or do they use iOS? Or are they active on both platforms? 

Let’s say you want to create separate apps for Android and iOS platforms, then the app development cost would be higher. 

While if you want to go for a cost-effective approach by developing an app that works across multiple platforms, then it would require less development time and effort. 

Type of development platform	Cost of developing an app
1.Android BNPL app development	$11,000 to $29,000 per platform
2.iOS BNPL app development	$12,000 to $33,000 per platform
3.Cross platform BNPL app development	$13,000 to $33,000

From the table mentioned above, the BNPL development cost for iOS is more because the Apple development toolkit is expensive. Moreover, iOS apps cater to high-income individuals who tend to spend more on in-app purchases. 

While Android app development for BNPL apps is less expensive as the Android development resources are cheaper and the cost of publishing an app on the Play Store is quite low ($25) compared to iOS. 

2. Type of Features (Simple or Complex) 

The app development cost also depends on the complexity of features. 

Let’s say, if you’re building a basic BNPL app then you must include these functionalities such as account registration, payment gateway integration, and user dashboard. These features are essential for running the BNPL app. 

While if you add advanced features (AI-powered credit scoring, personalized payment plans, fraud detection, push notifications, reward programs, customer support integration through AI-driven chatbots) for developing an After-pay app, then it would increase your development expenses. 

Features	App development cost
Simple application (essential features)	$150,000 -$250,000
Complex app (advanced features)	$250,000 -$500,000 and above

3. Location and size of development team

Another factor that contributes to the cost of building a BNPL-like app depends on where your development team is based. 

The development rates can be significantly lower in regions such as Eastern Europe and South Asia. However, for North America or Western Europe, the rates can start at $100-$200 and can go as high as $150,000 to $500,000 or more. 

If the developers you collaborate with are from the Eastern region such as India and China, then they would charge less compared to developers living in the US and Western Europe. The lower development costs are due to lower labor rates and a lower cost of living in these regions. 

Location of developers	Cost of development (on hourly basis)
US	$90-$95
Australia	$65-$85
Eastern Europe	$45-$50
Western Europe	$75-$85
Asia	$20-$35

From the available information, outsourcing a technology partner from Asian countries can be cost-effective. You will have access to a comprehensive team including UI/UX designers, quality analysts, app developers, web developers, and a project manager. 

Apart from that, different factors affect the app development cost, such as cultural differences, linguistic barriers, and time zone variations. 

Besides location, the size of the development team plays an equally important role. Smaller teams typically cost less but require more hours to complete the project. While larger teams can commit fewer hours, possess specialized knowledge, and consequently cost more money. 

4. Design and User Experience 

Creating visually appealing user interfaces plays a vital role in developing BNPL apps like After pay. A poorly designed user interface can frustrate users, lower conversions, and reduce revenue. 

The best way to design an engaging user interface for a BNPL app starts with understanding user needs and empathizing with potential users. Focus on identifying the target customers, such as: 

• Whether they’re millennials or Gen Z

• Their mobile app usage patterns

• Their preference for financial security and deferred payment 

An engaging UI/UX design is less about fancy visuals and more about creating a minimalistic, responsive, and quick-loading app with readable fonts and interactive features. 

5. Integration with External Services

Your BNPL app should be integrated with external systems such as payment gateways or banking APIs while adhering to compliance requirements. 

If your company doesn’t have its own payment gateway, integrating with third-party payment gateways is crucial to ensure smooth transactions between parties.  

Adding integrations increases your app development cost, and the expense depends on the number of integrations. Additionally, third-party integrations often charge their own fees. 

6. Complying with Financial Regulations 

A main driver of cost is the technical complexity required to make apps more secure. This involves integrating with payment gateways, financial institutions, and credit scoring platforms. 

The cost of technical complexities varies depending on the country of operation, including compliance with data privacy laws and financial regulations. 

Although the BNPL industry is becoming highly competitive and appealing to consumers, it must comply with specific regulations such as PCI DSS, GDPR, and CSS compliance. 

As a startup founder, you should always comply with financial regulations like PCI-DSS to protect user data. This means your fintech app must safeguard sensitive cardholder information.  

By adhering to these standards, you protect customers from potential financial loss. 

Compliance with financial regulations enhances your brand’s credibility and creates a positive market impression. Simultaneously, you must ensure that your fintech app meets legal requirements specific to your target market, as these can differ significantly. 

Essential Features to Include in Your After pay App 

Let’s talk about basic features to include when creating an After-pay app: 

1. User Onboarding (Sign Up) 

When building an app like After pay, keep the onboarding process as simple and smooth as possible. Users can sign up using Google, email, or social media login. 

2. Profile Creation 

The profile creation feature ensures that users can add their details, update them, choose from multiple payment methods, and track their payments. 

3. Flexible Payment Scheduling 

Users can choose to pay the full amount later and select when they want to pay (after a certain period) or opt for EMI payments, spreading the entire amount over 3, 6, 9, or 12 months. 

They can make online purchases hassle-free and enjoy the benefits of an interest-free credit period. 

4. Check Your Credit Limit 

A key feature to include when building a BNPL-like app is instant credit checking. Users can quickly check their credit limit with minimal documentation. 

This feature uses powerful AI and data algorithms to assess customers’ paying capacity and approve or decline transactions accordingly. 

5. E-commerce App Integration 

Retailers can offer a comfortable shopping experience by integrating BNPL apps with e-commerce platforms. Customers can directly shop and select the BNPL payment option. 

6. Secure Transaction Process 

To facilitate secure transactions, use a secure payment gateway. Additionally, comply with financial regulations, implement encryption, and use multi-factor authentication to protect users’ financial data. 

Such security measures increase app development costs. 

7. Reports and Analytics 

This feature allows merchants to gain insights into transaction history, performance metrics, and customer behavior, helping them fine-tune their strategies. 

By tracking sales and payment status, they can identify trends and make data-driven decisions to increase business revenue. 

Advanced Features for Building a BNPL App like After pay 

Here are a few advanced features you should consider: 

1. Smart Push Notifications 

These are personalized notifications informing users about overspending patterns. Users receive regular reminders about upcoming payments to help them manage their finances. 

2. Virtual Try-On 

Through augmented reality, customers can virtually try products before purchasing. A 360-degree view of items increases shopping confidence and reduces product returns. 

3. Green Financing 

BNPL apps can focus on environmentally friendly practices, such as offering consumers an option to donate a small amount to offset carbon emissions. 

4. Rewards Program 

To retain customers, consider adding a rewards program or special offers. For instance, Lazypay, a BNPL platform, rewards customers with assured cashback on transactions above a minimum order value (e.g., Rs 500). 

5. Multi-Language Support

Cater to international customers by offering support in multiple languages. 

6. Personalized Product Recommendations

These features track customers’ online purchases and offer personalized purchase suggestions. 

Step by Step Checklist in Creating a Buy Now Pay Later App like After pay 

Here are the steps involved in creating a similar app like After pay: 

1. Discovery Phase (Identifying Target Audience through Market Research)

The first step in BNPL app development is identifying the needs of your target audience through market research and competitor analysis to see what’s trending in the market.

One way to get input from users is by sending surveys or conducting focus group interviews. You can create surveys using SurveyMonkey.

Once you understand what the target group wants, you can focus on adding core features to your app. 

An app development strategy for BNPL apps becomes successful when you offer something unique to target customers, such as unique features or a new payment option.

2. Decide the Core Features and Functionalities of the App 

After conducting market research, the next step is to decide the core features and functionalities you should include in your BNPL app like After pay. 

Think about adding essential features of the app such as account registration, payment gateway integrations, shopping cart management, loan repayment system, etc. 

Then, prioritize adding advanced functionalities depending on your audience needs, such as reward programs, virtual try-on, personalized product recommendations, etc. 

3. Deciding the Tech Stack for BNPL App 

You need to select a technology stack that can handle the increasing number of users. For Frontend, you can use cross-platform frameworks such as React Native or Flutter. For backend development, you can select Node.js, Python, or Java. 

For storage and data management, you can rely on databases such as MongoDB, PostgreSQL, and for managing cloud infrastructure, AWS or Azure are used. Integrating with payment gateways and e-commerce platforms ensures that transactions happen smoothly.

4. Preparing the UI/UX Design

The next step in creating the BNPL app like After pay is designing a visually engaging user interface. Focus on creating wireframes and prototypes to structure the app’s design, usability, and workflows. 

When creating a buy now pay later app, the user interface should be engaging, intuitive, and responsive enough so that users get a consistent experience across all devices and screens.

More importantly, research your users’ needs to understand how they will interact with your app. This way, you can create designs that increase user engagement and retain users longer. 

5. Perform App Testing 

Here, quality analysts perform testing to ensure the app functions effectively across all devices, is free from bugs, and is highly secure. 

You can perform user acceptance testing to get input from users and fine-tune the product before its final launch. 

6. App Deployment 

After testing the bugs, the final step is to deploy the app on respective stores such as Google Play Store or App Store. After making your app live in the market, ensure it remains relevant and up to date according to current market trends. 

You can take feedback from customers to understand what features they want, add them, and iterate the product accordingly. 

Wrapping Up 

Building a BNPL app like After pay requires time, effort, and significant investment, and the cost varies depending on multiple factors. 

It depends on complexity, features, the development team you choose, backend infrastructure, security protocols, and integrations with financial institutions. 

These fintech apps offer convenience to customers as they can pay the amount in interest-free installments while allowing retailers to encourage purchases. 

As a Fintech app development company, we have the right resources to build an app like After pay that is scalable, secure, and meets the growing demands of users and merchants. 

We ensure that your app runs smoothly, including essential and advanced functionalities, with a strong focus on user experience and security.