After Covid-19 shoppers surely think twice before taking money from their pockets. That made brands find strategies to reduce barriers to buying. In risky economic moments, flexible payment is surely a seamless method to motivate customer purchasing.
That’s where now pays later comes. It enables consumers to enjoy spreading payments within time. Here in the article let’s discuss everything about Buy Now Pay Later and the benefits of having it in your store.
What is a “buy now, pay later” solution?
Merchants offer customers the finest power to pay by instalments. But now pay later provides a twist in the financing, especially for the Shopify retailers with easy installment plans. These quite deep solutions became popular in the USA. It all came to the limelight when merchants started providing them to produce sales from cash-strapped customers. Generally, shoppers would go to the store and then put installment payments to retailers in the exchange for holding any things they needed.
After the purchaser makes a payment that covers the purchase, the sale is finally finished. However, in the 1950s, innovation was launched that allowed shoppers to pay within time by credit card. Credit cards made shoppers’ lives easy by swiping and receiving items instantly. Then they pay the credit company later. Credit cards expanded rapidly and are in retail nowadays too. The main disadvantage of credit cards is they are accessible to the people who are approved for credit.
New fintech solutions provided contemporary alternatives to the credit cards made for the new customer. For example, Sezzle enables shoppers to pay for ecommerce purchases in 4 interest-free installments ways. So, shoppers can pay just a price fraction of the purchase while checking out. And merchants ship orders.
Buy now, pay later platform pays retailers upfront for the total amount that’s smaller than the processing fee. Overall, buy now, pay later options are a new way to buy now that get their item now. And they can pay over time without any extra additional cost. A Shopify agency can help you understand more about Buy Now Pay Laterand how your brand takes advantage of it.
1.Millennials like Buy Now Pay Later
Gen z & Millennials have over $350 billion in buying power. By the way, they adore the Buy Now Pay Later flexibility it offers. Typically, they make 60% of their purchases online. They ignore traditional credit cards, by making Buy Now Pay Later the best one these days. Did you know that millennials own 51% of the Buy Now Pay Later users, however they are not the only ones. Gen Z is even doubtful about the ability to achieve high-interest debt.
These generations grow to be prime customers. The main thing you should look at is their behavioural shift regarding alternative payments. And know how you can evolve with them.
2. Reach new conumers
You can’t just depend on credit card options to reach new consumers. Credit cards are a good purchasing tool, yet only for the people who got them. With potential credit card owners is fewer than you guess; just one or three millennials have a credit card. With severe underlying factors, it became tough for credit card companies to broaden their offers for those who are below 21 years old.
Payment behaviours are altering for the young customers who appeared to pay by using a digital wallet or just an installment plan. More than 87% of consumers are looking for an easy way to pay that isn’t a credit card. If you aren’t offering these then you are leaving money in your cart.
3. Easy Checkout Process
Fewer steps within order confirmation & shoppers are better to go with. With Buy Now Pay Later, you can simplify the checkout process as the shopper can log in to the account with the provider & crucial details are there already.
You don’t need to enter billing info or add a credit card. Buy Now Pay Later roots on the task while checkout without any user friction. BNPL flexibility that consumers get is important. It also makes shopping online with more options for payment. The skill to get orders when they have no funds or a credit card, Buy Now Pay Later offers instant gratification with flexible and simple terms.
4. Lessen Abandoned Carts
8 out of the 10 carts are abandoned. So, everything that you could do to decrease by 1 resembles a 10% raise in sales. Out of every Buy Now Pay Later user, 31% of people can abandon the cart if the BNPL isn’t the option.
The main reasons for abandoning your cart can be the price or extra costs at checkout. Promoting Buy Now Pay Later in the consumer’s journey. For instance, having a banner over the home page enables shoppers to know it is an option. You could have BNPL messaging in the cart abandonment offer which lessens sticker shock. That shows that they can afford things in the cart. You can also take advantage of the experts at Shopify plus agency to reduce cart abandonment.
5. Boost AOV & Conversion
Buy now pay later performs a lot to shift to the checkout experience for the future from the convenience it provides shoppers. How can these translate to the ROI? Buy Now Pay Later impacts AOV and e-commerce conversions. The average quad pay partner retailer has a 20% raise in conversions along with a 60% raise in AOV. Half of the customers reported that they spend 20 – 10% more as they are using credit cards.
Another survey revealed that the number was high. Unlike the misconception, most Buy Now Pay Later shoppers got good funds in the bank account while purchasing to fulfill the whole course with five times more than the whole purchase price. The payments are even cracked into small installments, the whole cost is quite manageable. This can make buyers receptive to upsells & add-ons at checkout, and can’t boost AOV for the online stores.
6. Retention & Loyalty
Why we should include Buy Now Pay Later options in the Shopify store is because it enables loyalty and develops consumer retention. With a positive purchase experience, you get repeat customers. And having many Buy Now Pay Later options will they make sure of you for the next order?
The comfort factor develops loyalty. Where 33% of the Buy Now Pay Later users made it a profitable and engaged customer segment. You need to be thoughtful in the approach whereas the usage of BNPL options, ease of use & transparency can’t overshadow the main point.
If it’s utilized improperly it could result in debt for the consumers. Retailers & Shoppers need to be aware of the risks & responsibility of the usage. The Buy Now Pay Later industry showed a big impact on the e-commerce industry that helps retailers get affordable options to pay however they want.
