BNPL services face merchant fraud concerns amid new market competition

New research from Chargebacks911 indicates that while buy now, pay later (BNPL) services have streamlined the checkout process, they have also introduced significant friction in the form of disputes and fraud. According to the 2026 Chargeback Field Report, 40% of surveyed merchants believe these platforms increase fraud risk. This concern is the primary reason cited by merchants who have chosen not to adopt BNPL services.

Among the 19.1% of merchants currently accepting BNPL, Klarna and Affirm are the most widely supported providers, used by 35% and 27% of adopting merchants respectively.

In a different market development, the Australian-based Limepay is launching a retailer-focused BNPL scheme designed to compete with established players like Afterpay and Zip. Unlike traditional models that often redirect users to third-party platforms, Limepay aims to allow merchants to maintain their own branding and keep customer data within their own ecosystem. The service integrates traditional payment gateways with installment plans, allowing for customizable schedules for higher-value goods.