From Cart to Commitment: How Airbnb Reimagined the ‘Buy Now, Pay Later’ Playbook

When the Buy Now Pay Later (BNPL) model was introduced as a niche offering for retailers in the 19th century, no one anticipated the revolution to be this grand. The system has grown to become a major contributor to the growth of retailers, digital platforms, and e-commerce in 2025. Globally, BNPL transactions have increased by almost 400% between 2019 and 2021, and are projected to reach $450 billion by 2026, according to Statista.

Breaking it down by region, by 2025, nearly half of retailers will offer the service, and 43-52% of U.S consumers will have used a BNPL service. The success of this innovation is something to learn from. However, there is a limitation in its relevance being implemented in experiences, not until Airbnb reimagined the model with its Reserve Now, Pay Later playbook.

The BNPL Boom And Its Retail Roots

The BNPL model started to emerge within retailers in the 19th century as the earliest form of installment plans for customers. However, it didn’t reach its full potential till around the 2010s. At this point, consumers could now pay off their online purchases in bits. The idea soon gained widespread adoption in the fintech industry, particularly during the COVID-19 pandemic. During the height of the pandemic, consumers flocked to providers like Klarna, Afterpay, and Affirm.

Soon, retailers and e-commerce platforms like Amazon, Shopify, and others had partnered with these platforms to offer curated payment plans for their customers. The popularity of BNPL was also fueled by consumers' interest in credit card alternatives that allow them to avoid accumulating debt and find options that offer flexibility in payment terms. The shortcoming of this model, however, is that it is more restricted to retail and tangible products rather than experiences.

The Problem With Applying Retail BNPL to Experiences

BNPL as a model for experiences just doesn’t work. Why? The retail market operates on the principle of recoverable value. That is, a canceled order can be refunded, resold, and relisted. However, when it comes to experiences, they are non-refundable. Your 3-day stay at an Airbnb in Cancun cannot be reclaimed. Travels, events, short-term stays, and other related experiences are perishable. It’s a function of time that cannot be recovered, which makes BNPL in hospitality a tricky model.

Canceling a trip doesn’t come without consequences, at least not on the host’s income. Airbnb has turned this challenge into a business opportunity by reimagining the core principles of Buy Now, Pay Later (BNPL) for the hospitality and experience economy through its new “Reserve Now, Pay Later” initiative.

Airbnb’s RNPL Model And How It Works

Airbnb officially introduced the RNPL initiative in the United States on August 14, 2025. The model was designed as a new way for US guests to reserve their stay with more flexibility. All that’s needed is for them to pay $0 upfront until the end of the listing’s free cancellation period.

This initiative marks a significant milestone compared to some of its earlier models. One that is very relevant to this story is the Pay part now, pay later feature launched in 2018. This allowed users to pay either 20% or 50% initially, before settling the balance later. In 2023, they teamed up with Klarna to introduce a plan where users pay for their stays in four installments over 6 weeks.

One notable aspect of these developments is that Airbnb continually seeks ways to evolve. They get feedback from their audiences and act accordingly on these suggestions. A survey conducted by the company in conjunction with Focaldata found that 55% of US travelers preferred a flexible payment option when booking a stay, and 60% highlighted the importance of having flexible payment options when booking a holiday.

The RNPL model has taken this reality a step further and significantly enhanced the flexibility of payment plans in the hospitality sector. This is, in fact, what BNPL is all about, but it’s now tailored specifically to experiences rather than the retail market. This shift reframes the BNPL model:

●      Retail BNPL → Optimized for conversion and cart size.

●      Airbnb RNPL → Optimized for trust, timing, and commitment.

Lessons for Product Leaders

The Airbnb RNPL model is more than a clever payment tweak, and there are loads of lessons to learn, especially for product leaders looking to take cues from the next wave of fintech innovation. Here are two major ones to take from this piece:

Payment Innovation Isn’t Just About Friction Removal

The traditional BNPL models were built around the primary goal of reducing friction and increasing conversion. However, the RNPL takes it a step further because it was introduced not only to speed up sales but also to build confidence and trust on both sides of the transaction. Hence, one question to ask yourself as a product leader is how to design flexible products that can strengthen trust on the part of your user.

Maximize Feedback Loop

In the section above, we referenced surveys conducted by Airbnb to understand their users and their needs. The company took steps to improve customers' experiences on multiple occasions, with the 2018 update and the most recent RNPL being major references. This approach underscores the relevance of feedback in building products and systems that last. Your customers and users' wants and needs should be heavily considered when making important decisions.

RNPL As The Blueprint for Product Managers

If big companies like Airbnb are constantly looking for ways to evolve, then you, as a product manager, should be making extra efforts to do the same. Think of RNPL as a model to imitate when it comes to innovating and ideating: work towards being solution-oriented and building trust with every user interaction you get.