Retailers use several strategies to entice you to buy during the holiday shopping season. Buy now, pay later finance, which helps you to pay off your purchase in installments or over time, sometimes with no debt or fees, is a crucial weapon many are relying on this year.
Although the outbreak of the coronavirus has thrown the economy into disarray and prompted more shoppers to shop online, these aren’t the real reasons why retailers are jumping on the BNPL bandwagon this holiday season. The real drivers are targeting millennial consumers and getting shoppers to open their wallets for spontaneous transactions. Here are the 5 Reasons on why a seller should offer Buy Now, Pay Later option for their Business:
· Millennials are attracted more through this method.
Both forms of buy now, pay later options are quickly gaining traction, with younger customers driving the trend. While younger millennials are less likely to trust conventional financial institutions in general, they do expect convenient payment methods. Buy now, pay later options are a new twist on layaway, enabling millennial shoppers to pay over time without the use of a credit card. These payment models are becoming more widely accepted as more big-name companies deliver them, implying that consumers demand them anywhere.
· Shoppers are leaving their Credit Cards for Buy Now and Pay Later.
Credit cards are still a common means of payment, but using them as the primary form of payment is just a smart choice if all of your customers have one. The number of credit cardholders in your target market is likely even smaller than you thought.
Carrying a huge credit card balance is frowned upon by millennials. Many individuals are seeking to escape the revolving debt that these payment mechanisms will contribute to. Millennials are notoriously suspicious of credit and debt. Only 33% of Millennials have a credit card, and many choose to make daily purchases using their debit cards. For those who don’t have access to a line of credit or don’t want to focus on it solely, buy now, pay later is a perfect option.
· Increased Sales.
Buy now, pay later options will help boost revenue and order prices by resolving the customers’ pressure points at checkout. Many Online Payment Services discovered that as retailers began offering to fund, average order prices increase.
Thirty percent of shoppers who used buy now, pay later options said they would not have made the order if they hadn’t been given six-month financing. Option to buy now and pay later will result in a 17 percent rise in incremental revenue. Furthermore, according to the survey done, customer finance triples average order prices.
· Improve your User Experience.
If given a payment package backed by an easy and seamless point of sale experience, most of the customers are more likely to make a retail purchase. Both in-store or online, today’s customers demand straightforward and quick payment alternatives, and buy now, pay later options are a viable alternative to conventional payment methods.
By placing all the details consumers need about borrowing in front of them at or before checkout, a smooth, full-funnel, and white-labeled buy now, pay later approach will take the friction out of the purchase process. Customers can conveniently navigate to checkout with financing through a smooth, consistent experience that suits the brands.
· BNPL is affordable for Customers hence sales increase.
Customers, want to stop loans and additional costs. When shoppers have to make a large investment, the last thing they want to think of is having to pay any more interest. In reality, numerous shoppers have been stressed out over how to pay interest on a large-ticket item. That’s why, when combined with 0% interest rates, buy now, pay later options are particularly successful. 85 percent of customers want their favorite stores to deliver interest-free buy now, pay later options. Although funding makes buying simpler for your clients, there is no “gotcha” moment for either the buyer or the store.
When a borrower does not pay back their entire balance during an interest-free introductory period, a financing company owes a high accrued interest rate. This will result in high APRs, rotating accounts, and a bad customer experience. Even though consumers make recurring deposits, you can collect the entire charge on all orders upfront, minus a minimal charge, on the retailer side.
Remember your clients when you decide which payment methods to feature on your eCommerce platform. If you can provide them with more choices, comfort, and affordability, they would associate these advantages with your brand. A rocky, high-friction or inconvenient experience is the same.
If you’re targeting a millennial demographic, make sure your payment choices match your values. Buy now, pay later options are the best bet if you want to offer the kind of cutting-edge experience that will fulfill their needs.
Allison Janney is a Sales & Marketing Manager at ChargeAfter. She would like to share content on Finance Industry like Point of Sales financing, Buy now Pay later, consumer financing & Ecommerce financing for valuable reader.