The buy now pays later option gives the customer the buying power they need. Let’s say you liked a product and purchased the item. As you reach the payment gateway you have a different payment option. You can buy your product and pay for it later over a period. This is what buy now and pay later.
The customer can pay using their credit cards or any other paying option. In most cases, the customer doesn’t have to pay any extra fee and interest. Some companies might charge you a small amount of interest for late payment. But how will BNPL help a business?
What merchants should be considering before starting to buy now pay later in their business. This might increase your business sales and can help you win many customers’ trust. But before offering, BNPL merchants should know a few things about it.
BNPL could be a good investment but you should know that there are also some risks involved in it. Before you begin your buy now pay later scheme you should consider your budget. If you are running a small business, you may not be able to provide your customer with BNPL. BNPL financing can only be applied for limited customers and on limited products. You also need a minimum budget to begin this financing option.
Attract New Customers
For sure it will attract new customers. There are people, mostly millennials who like to shop a lot and pay for their products later. BNPL could target those customers. You can attract new customers to your business by providing them with different payment options. It provides your customer the flexibility of their buying power. Build trust with your customers. People won’t think twice before buying anymore as they don’t have to pay the full amount at the time of buying the product.
Pricing of Your Product
You can change your product price according to your demand and sale. As customers don’t have to pay the entire money at once, you can even increase the selling price of your product but it will still be affordable for your customer as no extra charge or fee is included if the customer is paying late. More people will buy your product without worrying about the price of the product. As the payment is breakdown into a small amount that will make it affordable for customers
Compete With Other Merchants
One of the best things you can have by providing a BNPL option is you can compete in the market with other competitors. Many other businesses might be running the same business as you but still, you can be ahead of them by providing buy now pay later financing. This will give your customer a different option to make their payment and buy their product. BNPL is becoming a popular scheme for the new-gen as they have the opportunity to buy the product they want without thinking about the price because they can pay for the product later.
If you are not proving the BNPL scheme you are limiting your payment options for your customers. By providing different payment options you are giving your customers a second choice and giving them complete freedom on their buying power. As people can trust you more because you are giving them the option to buy the item now and pay for it later over a certain time. This will attract more customers and will also increase your sales that will automatically improve your business growth.
Lower Cart Abandonment
Many people leave their cart after adding products because they find it too expensive or don’t have a different payment option available. For example- you liked an item and thought of buying it. When you add the product to your cart and go to the payment option you find out that the product costs more than your budget and you don’t have any other payment option to choose from other than card payment. You leave your cart. If the customer has a BNPL payment option they can buy the product and can pay for it later. This will lower cart abandonment due to fewer payment options or not affordable products.
So, is the buy now pay later option the best option for a business? It depends on your business and if you want to grow your business and provide your customers with different payment options. Some merchants can gain a lot of profit from this if they use it in the right way. Some merchants might be charging some extra fee or interest from their customers when providing the BNPL option. But in most cases, there are no extra fees or interest included while paying using buy now pay later. The BNPL option is growing and it will keep growing to provide better payment options. The choice is yours if you want to start a BNPL scheme for your business? But there is also a risk involved that you should know about. BNPL can help your business to run for a long time.
Allison Janney is a Sales & Marketing Manager. She would like to share content on the Finance Industry like Point of Sales financing, Buy now Pay later, consumer financing & Ecommerce financing for the valuable readers.