The benefit of the Buy Now, Pay Later option has been recognised by most commercial store owners, who have contacted suppliers to integrate the Buy Now, Pay Later payment option into their e-commerce store. Several online retailers are aiming to become better versions of themselves. So as an online retailer your marketing site also should be updated on a regular basis by veering in the proper direction, and it should be able to rank among the best eCommerce retailers. Check here the Buy Now Pay Later Shopify to integrate with your business.
Why is BNPL beneficial for e-commerce stores?
BNPL, or Buy Now Pay Later, has become a popular alternative for customers in recent years because it refers to an interest-free, short-term payment method that is typically a user-friendly approach. It is a weekly or monthly EMI payment system that does not include any interest in the product price. As a result, customers are satisfied to be able to afford their needs when they want and pay a few times later for the same price displayed on the screen.
The Buy Now Pay Later function is exceptional in terms of providing the best service for an e-commerce site while also ensuring a hassle-free shopping experience for users.
Advantages of BNPL Methods
Creating a distinct brand identity
Your business can win client trust and expand by using the buy now, pay later option. Customers who have never purchased a product from you before, perhaps due to product quality issues, will be more likely to do so if your e-commerce shop gives the option to buy now and pay later. Customers have the opportunity to return items once they have received them if they do not like them. As a result, customers begin to trust your brand and contemplate purchasing from you on a regular basis. Customers will begin to choose your products in the future if they find your buy now, pay later option appealing. As a result, more people are aware of your brand and your business grows.
Increases the sales percentage
The buy now, pay later payment option benefits, customers, because it allows them to purchase items even if their account balance is insufficient at the time. Customers can then pay for the items once they are ready, which usually takes a few weeks. As a result, providing the facility boosts your sales rate, as opposed to when customers hesitate to buy because they don’t have enough money in their account. Furthermore, buyers who were hesitant to purchase a product due to its high price may rethink now that your e-commerce store offers a buy now, pay later option. It allows your business to stay ahead leaving behind your competitors.
Reduce the number of abandoned shopping carts
An e-commerce store owner is not required to have things ready for customers to purchase in the basket option. Customers may be hesitant to purchase them because they are expensive or they are concerned about the product’s quality. Because of the buy now pay later option, customers find it convenient to purchase items without paying right away. As a result, purchasers can return things if they are dissatisfied with them after receiving them. Previously, the cart was overflowing with items; however, now that the buy now, pay later option is available, app administrators can easily manage carts that aren’t overflowing.
Now let’s look at the disadvantages and implications of adopting Buy Now Pay Later:
Disadvantages of BNPL System
Late payment penalties
If you utilise buy now, pay later correctly and follow the regulations, you will not be charged any fees. You risk paying fines and penalties if you skip a payment. Klarna, for example, charges £15 for each delayed instalment on orders over £200. A maximum late payment fee of 25% of the total order value has been set by ClearPay.
Your credit score may suffer
The creditor may report you to the credit bureaus if you do not pay on time. This will lower your credit score and make it more difficult to obtain other forms of credit in the future. Don’t take credit for something if you don’t think you can afford it.
Shopping on the spur of the moment
If you don’t have enough financial discipline, buy now, pay later can cause you to splurge or engage in impulsive shopping. Knowing that they can pay in 30 to 36 months gives them the illusion of being able to buy almost anything. This could lead to a lot of debt for buyers. Some of the most regularly purchased items, such as health and beauty products, electrical devices, and clothing, may appear to be inexpensive at first, but the cost can soon add up.
BNPL Loans are of two types:
Loans with no interest- Instead of the customer paying interest on the loan, the retailer pays a charge to the third-party lending organisation with these types of loans.
Interest-bearing loans- These on-the-spot loans allow the customer to make a purchase right away, but at a rate equivalent to that of a credit card.
In most cases, both types of loans will specify a specific time frame within which the loan must be repaid in full. To know more about the BNPL system check here Buy Now Pay Later Shopify.
Some famous BNPL Companies
Affirm has worked with a number of well-known brands, like Pottery Barn and Expedia. It may offer clients the option of a short-term 0% interest deal or a 12-month loan with an APR ranging from 10% to 30% depending on creditworthiness. There are no late fees, prepayment fees, or interest charges if you pay early.
Through its app, Afterpay offers a short-term instalment plan. You use the free app to buy your item with a virtual credit card number, then make the first of four payments over the course of six weeks. Afterpay will set a credit limit for you, ensuring that you do not overextend yourself.
Klarna has a no-interest ‘Pay in 4″ plan that allows customers to divide any purchase into four installment payments. They also offer a “Pay in 30” plan on some purchases. If the merchant you’re shopping with isn’t yet a Klarna partner, you can download the Klarna app and use it to make an online purchase. You’ll be charged a late fee of up to $7 if you miss or skip one of your four payments.
Using these tools, you may successfully integrate the Buy Now Pay Later payment option into your e-commerce store, resulting in new customers and propelling your business to the next level. For additional details, click Buy Now Pay Later Shopify.
Author Bio :
Aline Huseby 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.