For modern shopaholics, nothing is as exciting as the idea of buying now and paying later. Fortunately for them, this fantasy is now a reality.
Buy now, pay later (BNPL) has gained huge popularity over the last few years.
With the advent of the Covid-19 pandemic, the ensuing lockdown, and the financial ramifications it has had for consumers and businesses alike, BNPL is likely to become an important part of the e-commerce domain. It enables customers to buy a product or service without worrying about the purchase price.
With the ability to encourage impulse buying and drive additional sales, it’s no surprise that BNPL is the next big payment trend in the online retail world.
The idea behind buy now, pay later is quite simple. Shoppers buy something online and, instead of paying the total amount upfront, pay in instalments over some time. BNPL also makes it possible for businesses to move goods quickly out of inventory.
Companies can offer their financing, or go through a third party such as Simpl or LazyPay.
At checkout, shoppers have the option to receive their product right away and pay the amount in full either after a set period or in smaller instalments over time. They usually have to make 3-4 equally spaced payments, also, there are no extra fees or interest charges, provided they pay on time.
The businesses have to pay the service provider a certain percentage of the amount as commission plus a fixed fee for every transaction.
The majority of the BNPL service providers do a soft credit check to avoid giving money to people who have shown general disregard for repayment obligations, but this isn’t universal.
A change driver that is closely tied to the BNPL boom, is the rise of social e-commerce. It enables users to shop directly from social media apps by bringing social media and e-commerce together. Buy Now, Pay Later assists in fast-tracking the purchase decision by providing shoppers with the option to pay later, leading to more impulse buying.
Whether or not they are active in the social e-commerce domain, brands with an online store need to optimize their checkout experience to remain competitive.
Now that you know what Buy Now, Pay Later is, let’s see how implementing it can benefit your e-commerce business.
For businesses, there’s nothing more frustrating than seeing visitors spending a lot of time on their website, browsing products, adding them to the cart, only to abandon them.
While there are multiple reasons for a customer to abandon their cart, affordability always comes on top.
BNPL enables customers to purchase goods even during a tight financial situation. Suppose, you are selling a certain product for two thousand rupees. If you let the buyer pay in two or more instalments, you will sell twice as many products.
Quick Tip – By offering BNPL and making the purchase more economical, you can reach a wider audience, including the younger generation. At ANS Commerce, our in-house tech Kartify is a feature-rich platform and comes with an integrated payment gateway. Request your free DEMO now.
The Average Order Value (AOV) is the amount a customer pays when they make a purchase. Many e-commerce businesses have witnessed more than a 100% increase in AOV after adopting the BNPL payment system on their website.
Smaller, spread-out payments increase the customers’ purchasing power, driving sales for businesses. People prefer BNPL to avoid the exorbitant interest rates of credit cards.
The Buy Now, Pay Later system is also quite helpful for brands selling high-value goods like jewellery and electronics. It enables consumers to purchase these expensive items without worrying about the payment. Therefore, making it easier for brands to drive order conversion.
A hassle-free custom experience builds loyalty and encourages repeat purchases.
For a customer, more ways to shop, pay, and products to choose from, are all positive factors. Offering customers the option to shop and pay the way they want leads to an increase in loyalty and sales.
Which payment method you choose to provide on your checkout page is up to you. Although millennials are more likely to prefer mobile wallet/UPI, the more choices offered, the better.
BNPL is just one more option the customers would like to see on the checkout page. Adopting this growing trend can provide them with a seamless shopping experience leading to repeat business.
There are always certain drawbacks associated with every financing option, BNPL is no exception.
Our in-house, fully customizable, integration-ready proprietary brand store platform, Kartify comes with a payment gateway that is safe and secure. We do not store user financial details and conduct regular security audits for more safety.
BNPL is the latest wave within the fintech industry to further disrupt the traditional banking and business landscape. With the long-term financial impact of the Covid-19 pandemic, especially among the younger generation, BNPL services will likely witness accelerated adoption in the future. Kartify offers an option to enable BNPL for our partner brands. We advise you to jump on this trend with our assistance so that you can drive more sales, safely. Request your free DEMO now!
