The revenue gap in your funnel. And how Pay Later messaging helps close it

You optimise checkout. You track customer conversion. You monitor cart abandonment and refine payment options.

Checkout KPIs are where you concentrate. And that makes sense.

But many of the decisions that shape whether a shopper places an order happen before they even get to the checkout. Chief among those is their budget. At every step of the funnel, your shoppers are sense-checking whether they can afford their order. That’s why how you communicate flexibility around payment options is so important - it affects whether your shoppers decide to buy at all.

When a pair of £150 trainers becomes three payments of £50 or a £999 TV becomes three instalments of £333, a customer who might have stalled is more likely to continue with their journey. But if they never see “Pay in 3 interest-free payments of £50 with PayPal”, they may abandon before they’re even close to checkout.

This creates a performance gap that is easy to miss: smaller baskets, missed conversions, fewer repeat orders and reduced reach among shoppers who are actively considering their budget.

So what happens when you fix it?

The data shows a measurable shift in how customers spend, convert and return when Pay Later is introduced earlier in the journey.

A high-level signal that your store offers flexible payments at the start of the customer journey.

Messaging placed near the product price, often showing the instalment amount alongside the full price. This is the point where customers evaluate affordability.

A reminder that the order total can still be split, helping to maintain momentum as the value of the purchase becomes more concrete.

An important placement, but ideally not the first one. At this stage, Pay Later should feel familiar, not a new concept.

A clear payment option presented alongside others, rather than hidden in a dropdown or buried deeper in the flow.

Together, these touchpoints make managing budget visible throughout the journey, within a PayPal experience customers already recognise and trust.

When businesses move from checkout-only Pay Later to full-funnel presentment, the impact is measurable and consistent across the PayPal Checkout experience.

In the UK, merchants adopting upstream messaging on its own saw a +6.9% increase in PayPal-branded total payment volume (TPV).² When upstream messaging was combined with a second PayPal button, the impact rose to +11%.³

Within the broader PayPal checkout experience, Pay Later visibility doesn’t just lift overall PayPal volume. It also helps Pay Later work harder. UK data shows that adding Pay Later messaging and/or a second button has been associated with increases in Pay Later sales of up to 35%.⁴

The data shows a consistent pattern: when spreading the cost is visible earlier and reinforced throughout the journey, customers are more likely to convert.

An internal PayPal analysis of UK small business merchants that activated upstream Pay Later messaging between October 2020 and September 2024 offers a closer look at what changed after activation.³

In this sample, Pay Later payment volume was observed to be +49% higher after upstream messaging activation,⁴ and Pay Later transactions increased by +38.8% over the same period.⁴

The data also points to shifts in Pay Later usage. First-time usage was +47.7% higher after activation,⁴ suggesting that making Pay Later visible earlier helps more shoppers try it.

Repeat transactions were +19.6% higher,⁴ indicating that customers who have used Pay Later before are more likely to return to it when the option is consistently present.

Overall, the data indicates that when Pay Later is visible throughout the journey, usage is higher across both new and returning customers.