Buy Now Pay Later Solutions Are Gaining Popularity

Since the beginning of the pandemic, we all know that businesses have swiftly pivoted their products and services to be accessible on their online site or app. But there’s one often overlooked consumer-based trend that has been gaining traction right alongside this digital transformation. The buy now pay later payment model has quickly outpaced layaway and other similar options and is becoming an increasingly popular offering on product pages and in the shopping cart and online checkout arenas. Here’s what you need to know.

What is Buy Now Pay Later?

Buy now pay later, often shortened to BNPL, is an installment loan without the normal hoop-jumping that takes place when you are trying to secure a loan from your bank. It divides a larger purchase (typically items with price tags around $100 to $800) into several smaller payments that are then automatically applied to your credit or debit card in a recurring fashion until the full amount is paid off. Sometimes these plans have interest or late fees attached, though many don’t.

The option to buy now and pay later can be incorporated into a few different areas of your website. You can add it to your shopping cart pages, or to the product or service landing page itself. BNPL is also commonly included in the checkout process, though many have found success with decreasing the number of abandoned carts their business encounters when the BNPL options come before that checkout process. Customers who are on the fence about buying a higher ticket item can more easily commit to making a few $50 payments versus charging a few hundred dollars to their credit or debit cards right now.

Advantages & Disadvantages of BNPL

As we stated above, the customer benefits of buy now pay later payment methods include the deferral of the full amount upfront, and since many BNPL programs don’t have interest rates attached, it’s more cost-effective for the customer than putting a large amount on a credit card, and then having to pay interest on the amount during each month that they don’t have the full amount paid off.

For the vendor, you have a variety of options to help your customers pay for your bigger ticket products and services. If your more expensive product lines are the most common items left in abandoned carts, you can offer BNPL to help ease a customer’s financial burden. Similarly, you can offer BNPL at checkout for the total amount of the shopping cart. This can increase sales on items that have slightly less demand than your most popular products and services. For example, if your company sells a product that has consumables or customizable extras, your budget-conscious customers will likely stick to your basic product or package. But if you offer a BNPL option, those smaller ticket items can be added on, grouped together at checkout, and your customers will get everything they need rather than bargaining with themselves about how much or how many of your offerings they “really need.”

BNPL also offers your customer some predictability. When each customer or prospect visits your site, they range in their preparedness to purchase. And many people load up their virtual carts, only to see the total cost and leave altogether or greatly pare down their purchases to fit within their decided budget. Adding the predictability of a set payment can be both empowering and reassuring because we’ve all gone to an online store and purchased half of the items we want because of the expense. Sure, we promise ourselves that we’ll go back next month or when we get our next paycheck, but if the product or service isn’t something your customer is thinking about on a regular basis, it could be months or years (if ever) before they get back to your site and make another purchase.

Because of these aspects, BNPL services have been touted as a great way for small retailers to increase their sales.

Online & Recurring Payments Are Made Easy with ReliaFund

ReliaFund is your integrated payment processing platform, equipped with all the tools you need to set up automated billing, recurring payments, and much more. With ReliaFund, you can accept ACH payments, all major credit cards, and debit cards on y our website, which is attractive to your customers who are looking for fast and easy checkout and billing processes. We can also help you manage a subscription or BNPL model with recurring payments.

Contact us today to learn more.

Buy Now Pay Later Solutions Are Gaining Popularity