When making online purchases, nearly 42 percent of BPNL users choose clarity of terms, and 39.1 percent prioritize the opportunity to track spending.
Advantages for retailers
The BPNL approach is utilized by shops that sell high-priced goods or those selling low-priced goods but want to increase conversions, cart size, reach new customers, and retain existing ones. However, stripe, a QuadPay partner, believes it is not suitable for firms offering services or software or those concerned with costs because fees are higher9.
Sales value has increased. According to Klarna, implementing a BPNL function resulted in a 33 percent rise in the value of sales at its client GymShark. According to QuadPay, merchants who have adopted its BNPL product for e-commerce have witnessed a 20% boost in conversions and a 60% rise in average checkout value10. It is a method of ensuring revenue without using methods such as discounting.
New clients Customers who were previously unwilling to acquire things because the price was out of their budget may be enticed by a BPNL option. For example, Blackpool, a lifestyle brand, claims sales increased by 600% after launching its BNPL plans. According to its CEO, it has attracted “various groups, including price-conscious consumers who may believe our quality products are priced out of their grasp.” 11. The providers will showcase a store’s products and brand to millions of potential customers with their community.
Loyalty Customers who are aware of the availability of this option on an eCommerce store and appreciate the seamless aspect of the customer experience are more inclined to return for repeat purchases.
On the other hand, retailers must consider how they will share the client relationship with the BPNL supplier.
Integrations
The most significant barrier to BNPL adoption used to be the time-consuming procedure of directly integrating into the retailer’s point-of-sale system. BPNL services, on the other hand, are expanding their interfaces with existing eCommerce platforms like BigCommerce, Shopify Plus, and Salesforce Commerce Cloud to make it as simple as flipping a switch.
Customer disadvantages
While the soft credit checks performed by BNPL providers at the time of purchase do not affect customers’ credit scores, late payments can. Customers who fail to pay may be barred from making additional transactions. In addition, the terms and conditions of the BPNL service providers are not often clear at sign-up, resulting in unexpected expenses.
Buy now, pay later is the way of the future.
As the use of frictionless, contactless experiences and mobile wallets at the checkout in retail environments grows, so should the adoption of BNPL. According to the Global Purchases Report 2020 by Worldpay from FIS12, BNPL payment methods increased from 3% of all eCommerce payments in 2018 to 8% in 2019. In addition, customers are increasingly being offered BNPL services outside of eCommerce to pay for goods, and they may one day be as common as credit card payments.