TOP BENEFITS OF BUY NOW PAY LATER FOR CONSUMERS AND RETAILERS
The global ecommerce is expanding rapidly and the Buy Now Pay Later payment solution has revolutionized the global business marketplace. Although the concept is not entirely new, the amalgamation of this financial tool into the digital space has led to major consumption splurges. People, especially the millennial generation, are able to shop spontaneously on-demand removing any kind of barriers. Consumers can check out without making the entire payment and pay the bill later in several installments.
What is BNPL?
Ecommerce web portals and online retailers offer BNPL facilities to buyers. Unlike traditional installment methods where the item could be taken once the full payment has been made, buy now pay later or BNPL is an alternative user-friendly option that does not keep people from taking their purchases home, immediately. People get to make the payment over multiple installments across a certain period of time. The BNPL industry is growing significantly that is both expanding the retail industry and increasing the credit access.
There several excellent reasons why several brands and stores are adopting the concept of BNPL and are ready to offer this payment facility to its customers. It not only increases revenue generation but also strategically entices people to engage in impulse shopping. If not for BNPL, big carts would not have been emptied and sales would have been lost.
Consumers enter into a contract where they are obliged to make the complete payment for the products or services they have purchased but not paid for upfront. Companies are tied up with buy now pay later service providers that make the payment on behalf of the customers. Like credit card facilities, it then becomes the responsibility of the BNPL provider to obtain the complete money amount from the users. Payment transaction made using the buy now pay later facility is often subjected to late fees as applied by the service provider.
Although it becomes complicated, business companies can themselves organize for a credit solution that provides with the BNPL option to buyers. This helps businesses cut down on the third-party BNPL vendor charges.
The buy now pay later payment method is advantageous mainly for the lower income category that also might not have access to credit card facilities. The BNPL services make the payment on behalf of the customer who later pays back the BNPL provider installments.
Benefits for Retailers
The buy now pay later model is a practical solution for retailers and e-commerce websites. It is great option for businesses dealing in different products and services that seek to expand their customer horizon.
Increase in Sales
With different kinds of payment options available, consumers are more likely to spend their money for purchasing purposes. The introduction of BNPL technology has witnessed an increase in the overall sales percentage and a rise in revenue.
Attract New Customers
Customers, previously uncertain about making a purchase, are now being lured to make those purchases as a result of the BNPL option. People of different demographics as well as price-conscious consumers are actively engaging in buying and shopping of products and services they were hesitant about.
Individuals with a stable income ground also tend to leave their cart during checkout. BNPL works at the level of human psychology where visitors excited to buy new items are likely to go ahead and do so. The rate of abandonment of cart is likely to fall that will automatically boost sales and drive home a larger profit.
Improved Customer Loyalty
In addition to the increased number of customers, BNPL payment options ensure a loyal base of customers who are willing to shop from the particular online retail store on a regular basis. The purchasing value is highly dependent on whether the buy now pay later option is available to the customers or not. BNPL opportunities greatly impact the odds of visitors converting their expensive carts.
Opening up a holistic loan-oriented income experience is likely to ensure the return of previous customers and repeat purchases. Moreover, consumers are able to test out a product before committing to it. The long-running benefits of such measures are elevated that also guarantees substantial customer loyalty. This helps build a strong relationship between buyers and businesses.
Lower Cart Abandonment
Consumers quite often leave their carts without purchasing the items due to price apprehension, credit systems and other factors. An increase in payment options that incorporates BNPL methods help lower the rates of cart abandonment.
Benefits for Consumers
Not only merchants, but consumers also profit from the buy now pay later payment plans. Let us look into the key benefits.
Improved Credit Solution
The BNPL method is a securer and reasonably better credit resolution for many customers. People are no longer hesitant to make quick or emergency purchases.
Easy To Use
Payments are broken down into easy and manageable fixed installments that help buys to to stick to their monthly budget plans. Also, no additional charges are levied if the installments are paid on time.
Repayments in BNPL solutions are flexible. The user can choose the most suitable tenure and make the repayments prior to the due dates.
As a result of the entry of mobile wallets and contactless payment experiences, BNPL options are here to stay. Despite several negatives associated with this method of payment, buy now pay later services are largely being utilized by e-commerce and consumers alike. Businesses without the BNPL option for payment are likely to face a disadvantage in the current competitive market where entrepreneurs are increasingly adopting strategies that are guaranteed to convert visitors into potential customers that will eventually lead to the creation of a band of loyal consumers.