Over the past few years, a new trend has emerged in the world of eCommerce. Whether you run a Shopify, WordPress, or Wix eCommerce store, the newest trend – Buy Now, Pay Later (BNPL) has become a necessity. This service allows customers to buy products without interest rates or additional charges. They can pay the amount in installments or at a later date.
In this blog, we will provide insights into what BNPL is, its benefits, how to choose the right solution for your business, and how it can be advantageous for eCommerce businesses.
So, let’s discuss it!!
What is Buy Now Pay Later?
BNPL stands for Buy Now Pay Later, a convenient payment option that enables consumers to make purchases without paying the total amount upfront. To use this service, you’ll need to sign up with a provider who will cover the cost of your purchase. However, you’ll need to pay back the money within a specific time frame.
One of the main advantages of BNPL is that there is usually no interest charged, unlike a personal loan. You can pay the total amount in one go or split it into no-cost EMIs. However, if you fail to repay the amount within the fixed payback period, the lender may charge you interest on the outstanding amount.
What Is The Reason Behind The Popularity of BNPL Among Consumers?
BNPL is like a game where consumers do not need to wait for payday to buy something. The BNPL offers many options, simple installment plans, and flexible terms for a few months to a few years.
This is a win-to-win situation for customers, as they receive the purchased product before completing full payment and can pay on fixed, later dates without any interest. There are no additional costs, such as transaction fees, maintenance fees, or penalties.
How Does The Buy Now Pay Later System Work?
If you own a Shopify, WordPress, or Wix eCommerce store, you can include a buy now, pay later feature during checkout. You need to work with payment gateways that allow for installment payments.
Buy now, pay later is advantageous if you sell large ticket items such as furniture, home appliances, electronic gadgets, etc. Enabling consumers to make installments helps you increase your store’s overall sales.
Here are three quick steps to set up buy now, pay later:
- Easily integrate with your eCommerce site: Integrating with your website is easy with MONEI, PayPal, etc. After registering your account, you can set up different payment methods, such as credit cards, digital wallets, and installment payments.
One of the best examples of integration of BNPL with an eCommerce site is Amazon Pay Later App. Your customers simply need to log in to their account, navigate the payment option, select Buy Now Pay Later option, and follow the instructions to complete the process. This way, it lets them pay for purchases in installments, making larger purchases more affordable and easier to manage financially. - Customers can select to buy now and pay later: After enabling the pay later payment option, customers have the option to pay for their purchases in installments.
- You get paid in full while the customer pays in installments: Establishing a connection with new customers involves being flexible. These individuals may feel more at ease committing to a lower payment at first as they are unfamiliar with your company.
Six Essential Ways Your Business Can Profit From BNPL
Is it worth adding BNPL to your eCommerce store? Here are six benefits of offering BNPL on your online store.
Keep reading to know about them!!
1. BNPL boosts sales.
In some situations, customers want to buy something from your store but do not have enough money, especially for expensive items. In such a case, providing customers with the BNPL makes the purchase affordable and helps you boost your Shopify, WordPress, or Wix eCommerce store sales.
Here is one example:
A person finds issues with purchasing a $1000 item, but if you enable them to split the payments into five installments, the consumers become much more tempted.
2. BNPL increases your average order value.
Did you know that Buy Now Pay Later (BNPL) options can encourage customers to purchase more and spend more money at once? This can increase the average order value (AOV) and ultimately lead to higher profits for businesses.
Recent research indicates that in 2021, the buy now pay later (BNPL) customer base for online and offline retail was five and two million, respectively. This is expected to surge to 30 million for online retail and 22 million for offline retail in 2026.
3. BNPL helps you to build customer trust.
BNPL allows consumers to test a product without paying the full price upfront. If the item meets their expectations, they can pay for it in installments. If they are not satisfied, they can return it without any concerns. It’s worth considering that customers spend a small amount of money on the total price of the product.
By offering a reduced risk for customers and building trust in your brand, you demonstrate confidence in your products and a willingness to let customers try them without paying the full price.
4. BNPL lowers cart abandonment.
A recent study shows that in 2022, many online shopping orders were abandoned, i.e., not converted into a purchase. There may be two reasons: some customers may be unable to find a payment method that works for them, while others may abandon their cart due to concerns about affordability.
By offering Buy Now Pay Later (BNPL) as a payment option on your Shopify, WordPress, or Wix eCommerce site, you can solve two problems: providing customers with a convenient payment method and making expensive purchases more affordable, thus reducing the likelihood of cart abandonment.
5. BNPL offers high conversion rates.
Improving customer retention leads to higher eCommerce conversion rate optimization, which optimizes the process and increases profits. Implementing Buy Now Pay Later (BNPL) as a payment option quickly and effectively can give you a competitive advantage.
6. BNPL entices new customers.
Providing a “buy now, pay later” option can enable you to reach potential consumers who are interested in purchasing your products but may not be ready to pay the total amount upfront. This option is becoming more popular than credit cards, especially if no extra fees are involved.
Conclusion
Online shopping has become more popular, and consumers find different ways to pay for their online purchases. Offering consumers a buy now, pay later option to your Shopify, WordPress, or Wix eCommerce site will help boost sales, reduce cart abandonment, build customers’ trust, and increase order average value and conversion rates.
The best thing about BNPL is that it does not pose any risks to your business. Therefore, including BNPL as a payment option on your eCommerce site is highly recommended.
We hope you have enjoyed reading this blog. Stay tuned for more blogs from us in the future.