Buy Now Pay Later (BNPL) is a type of financing that lets customers pay their bills over a small amount of time instead of making a lump sum payment in advance. Buy Now Pay Later electronics, as its popularly known, offers customers the option of borrowing credit, usually without interest.
Buy now and pay later is a standard payment option for online shoppers, particularly after the pandemic outbreak. In 2020, instalment options increased by 55 percent in Spain.
- 1 What is buy now and Pay Later?
- 1.1 The millennial generation is driving to buy Now Pay Later
- 1.2 Possibility to increase sales
- 1.3 Buy Now, Pay Later, a user-friendly way to pay
- 1.4 Consumers would instead Buy Now and Pay Later, rather than credit Cards
- 1.5 Buy Now, Pay Later makes shopping easier
- 1.6 Helps build trust and loyalty
- 1.7 New clients are attracted to the company
- 1.8 Conclusion
What is buy now and Pay Later?
With this method, one can buy an item with only a small initial investment and then pay the total amount in instalments. The amount can range from two to four components following the individual’s preferences. Even though there isn’t any interest applied in the event of a failure to pay, the payment may result in an additional penalty. To benefit from this buy now and Pay Later electronics method, buyers must provide vital personal data. This includes the name and email address, the birth date, as well as the address of the charge. This is not typical for a credit card in which a customer must provide a lot of personal data. Get the MasterCard applicant; they must also pass an identity check before being approved to be eligible.
Presently, companies like Amazon Pay Later, Paytm Postpaid, and Flipkart Pay Later offer this service to pay for electronic products to their customers. If you are looking for expensive purchases, you could also provide the BNPL instalment plan to customers who purchase everyday things such as homeware, clothes, and so on. And that’s just the beginning.
Buy Now, Pay Later, The reasons why you should consider offering credit at checkout
The millennial generation is driving to buy Now Pay Later
The demand for short-term installment loans has increased in the last three years, primarily because of Millennials (individuals between the ages of 23 and 38). The 2008 financial crisis has caused distrust with traditional banks, as did Generation X parents (individuals aged 40-54) and, in some instances, Baby Boomers (individuals aged 66-75) have frequently warned them about the risks from credit cards as well as higher interest rates. Generation Z, the younger generation, including Generation Z, those who are aged 18 or over, are shifting to digital banking. Consequently, they’re walking into banks’ brick-and-mortar locations much less frequently.
Possibility to increase sales
There is evidence that when customers are given the option to buy now and have the option of paying later are bound to select this installment method. Using BNPL in the online business market can result in 20% changes and a 60 percent increase in the standard checkout value. Most of the time, it is because buyers can spread the amount of their installment, giving buyers the chance to purchase something with the assurance that they will be able to repay it in one payment.
This method is particularly beneficial to those in a financial bind on the days before payday. Additionally, this helps to acquire higher-end items cheaper, which increases the chances of a more significant change rate. This makes BNPL an instrument for changing window customers into paying customers.
Buy Now, Pay Later, a user-friendly way to pay
Technological advancements have enabled customers to be in the “driver’s seat” regarding their shopping experiences. A user-friendly and transparent experience is essential for adding new processes to your company. The Charge After Buy Now Pay Later platform is easy and clear to navigate.
If your customers are ready to pay for their purchases, they can choose the financing option that is available along with traditional payment options. The buyer will complete a quick finance application, and customized financing options will be displayed once approved. After the customer has selected the best financing terms that match their requirements, they will be applied to their purchase. The entire process will take less than an hour!
Consumers would instead Buy Now and Pay Later, rather than credit Cards
Credit cards are still widely utilized, but consumers aren’t dependent on credit cards as their primary payment method. Instead, consumers are relying on their debit cards. If you’re a business owner, you shouldn’t assume that most consumers have access to or utilize credit cards as a payment method. In reality, most of your customers may not own a credit card.
Business Insider reports that 68% of millennials don’t have one credit card! The Millennial generation is the highest percentage of the U.S population, with 26%, and the employed population of 34%. It’s easy to see the reasons why their habits and preferences can have a significant impact on the way they shop.
Buy Now, Pay Later makes shopping easier
Customers are loyal to companies who help them manage their credit relationships and stay clear of their dangers. People don’t have a problem with the “buy now and pay later” model and appreciate it. You will not only have a competitive edge over other retailers, but you’ll also improve the relationship with your customer’s thanks to the convenience made available.
A study by PYMNTS showed that 74 percent of US cardholders believe that instalment plans can be beneficial to budgeting. Moreover, 70% of customers believe instalment plans ease the burden of buying large items upfront. A study conducted by Citizens Financial Group observed that most customers would prefer fixed-monthly methods with clear payment terms.
The results show that customers prefer a straightforward shopping experience when making purchases. Research suggests that retailers must modernize their payment methods by shifting away from store credit and co-brand approaches and instead provide quick credit options at the point of the sale.
Helps build trust and loyalty
BNPL attracts more customers to buy and pay attention to the product as you provide an opportunity to test the item without needing to concentrate on the product in all its details. Customers can purchase and approve the product at any time however they prefer.
New clients are attracted to the company
Offering customers the option to buy immediately and pay later could help attract those who have not solely been wishing to purchase your goods but those who don’t want to commit to spending everything now. This is especially true when they don’t have to shell out extra the same. It’s a naturally sought-after alternative over MasterCard’s.
Giving your customers buy now and Pay Later electronics and many payment options is crucial to improving customer satisfaction, and it can assist in converting more of your customers to regular (and long-term) customers. A seamless checkout experience will result in more sales, brand trust, and lower cart abandonment rates.