Buy Now, Pay Later: Transforming Online Shopping Experience
Due to the economic uncertainty brought on by the COVID-19 pandemic, many consumers resorted to alternative means of financing their purchases. Credit card companies that impose high fees and APRs just don’t cut it anymore, which is exactly how the buy now, pay later (BNPL) scheme became more popular.
Nowadays, many eCommerce platforms offer the option of BNPL as a payment method, opening a new age of payment methods even more convenient than credit cards. In this article, let’s look at how BNPL is transforming online shopping and the customer’s user experience.
What Is Buy Now, Pay Later?
Buy now, pay later (BNPL) is an alternative payment method where consumers can purchase items without having to pay the full price upfront. Instead, they can make monthly installments, each followed by a small handling fee.
Usually, BNPL is offered by credit card companies, but now eCommerce platforms like Shopify and eBay offer it as a payment method. This way, consumers can enjoy the convenience of online shopping with the option to pay later.
How Buy Now, Pay Later Works
The BNPL model works similarly to the traditional credit card scheme. The consumer adds the item to the shopping cart and pays for it using the BNPL option. In exchange, he receives a payment agreement from the BNPL provider and details on the necessary handling fees and installments.
The first payment must be made within a specified period of time (e.g., between four to six weeks). If the consumer fails to pay the installment on time, he is automatically charged extra fees until he makes the payment.
The installments are scheduled on a monthly basis. These will vary depending on the number of payments, the interest rate, and the handling fee. Payment methods will also depend on the BNPL provider. Some providers offer the option to pay either monthly by credit card or by direct debit.
The BNPL Checkout Experience
A dedicated BNPL checkout option offers an intuitive and convenient checkout experience.
The BNPL checkout experience is often streamlined to allow for fast and easy checkouts. Separate steps are included for entering personal details, payment information, and shipping details.
It’s an easy way to make online shopping as flexible as possible for the consumer.
Why Buy Now, Pay Later Works for Your Business
It’s no secret that customers prefer convenient payment options. This is why crowdfunding platforms like Kickstarter and Indiegogo have been so successful. And now, with the rise of BNPL, there are more options than ever before to make payments easier for customers.
To make BNPL work for your eCommerce business, there are a few considerations to keep in mind:
- Build a secure BNPL payment option that’s safe and convenient for your customers.
- Display the BNPL payment option during checkout to increase conversion.
- Give customers a genuine reason to choose BNPL. Show them the benefits.
On top of that, BNPL works best for businesses that offer products from $100 to $500, mainly electronics and apparel. These products are easier to pay for via BNPL and are shipped relatively fast.
Conclusion
With the rise of eCommerce, more and more consumers are choosing to shop online. This means you’ll need to meet the needs of these consumers to keep them happy. Luckily, BNPL can help you do just that. Buy now, pay later is a great alternative payment method to credit cards. It gives businesses the opportunity to attract customers who would otherwise be hesitant to make purchases due to their financial situation.
If you want to learn more about business intelligence and other IT-related topics, check out Technical Paradigm’s blog posts. We are a Recruiting-as-a-Service (RaaS) company employing a strategic approach to your staffing needs. By working with a technical recruitment company like Technical Paradigm, you can benefit from our IT staffing solutions tailored to help you achieve your goals as a business. Work with us today, and let us help you find the perfect talent for your needs.