How Can You Accelerate Your Business With Buy Now Pay Later?
The healthcare crisis that crippled the global economy since the end of 2019 created an environment where traditional modes of business cannot properly function. The introduction of the Buy Now Pay Later service acted as a boon for the growing cash crunch and the demand for contactless shopping/purchases.
Buy Now Pay Later is a new payment facility that allows individuals to shop without paying anything upfront. Instead, one can pay at a future date as per their convenience. This necessity automatically led retailers/merchants to adopt Buy Now Pay Later Business model to align with consumers’ demand. The repayment facility at a later date undoubtedly benefits consumers. However, many businesses are sceptical about the advantages of adding this facility to their modules, getting the cash and managing business operations.
This piece will thoroughly explain the benefits of integrating the Buy Now Pay Later facility and its ability to give a business the necessary traction; read on.
Buy Now Pay Later: Definition And Working Method
As the name suggests, Buy Now Pay Later (BNPL) enables consumers to purchase anything online, and instead of paying the amount upfront (at zero to low-interest rate), they can do the same in instalments over some time.
BNPL is short-term financing that allows consumers to buy anything anytime without waiting for salary/accumulating the total amount. This payment facility is becoming increasingly popular among Millennials or Generation Z, who do not have a credit card and can purchase anything instantly.
BNPL as a payment facility works in a similar way as it does for a business. Wondering how?
When customers purchase a product, they get it instantly, and the product amount is converted into EMIs.
On the other side, businesses that sell these products instantly get the product amount. Here, they need not wait for ages to receive payment from customers or doubt if at all they will get the same. Instead, they can plan their finances and function as they used to do.
Buy Now Pay Later Accelerates A Business: How?
Read on to know how Buy Now Pay Later can accelerate a business:
- Immediate Capital Injection
One of the effective ways BNPL accelerates a business is that it lets instant injection of capital. Businesses receive the total transaction immediately, whether a customer has paid for the amount or will pay in instalments. This helps companies use the amount at their discretion, meaning retailers can hire new employees, purchase raw materials, accept new orders or open branches at new locations.
- New Customers
When businesses offer different yet familiar payment options at the point of sale, it helps attract new and more customers. As stated earlier, BNPL is becoming popular among Millennials and Generation Z who do not have credit cards and cannot purchase products as per their choice and requirement. In addition, this payment facility has enabled businesses to build marketing channels, i.e. email marketing shop directory, which open new ways to attract and reach new and more customers.
- Higher Conversion Rates
An online business becomes successful only when it can help convert visitors into customers. While there are numerous reasons to abandon a cart, the factor of affordability bothers consumers more. Here, suppose consumers see a new payment method that enables them to purchase products without paying any amount immediately. In that case, they can choose to buy products even if they are in a tight financial situation—all these help increase cart conversion rate.
- Increased Average Order Value
The Average Order Value (AOV) refers to the amount a consumer pays while purchasing. When consumers choose to split up their purchases, it increases their total purchasing power. This becomes helpful when buying high-value jewellery or electronic products. By integrating Buy Now Pay Later at the website, i.e. point of sale, eCommerce businesses can increase AOV 100%. Isn’t it amazing!
- Improved Cash Flow
Buy Now Pay Later business model helps retailers to optimise cash flow. This new-age digital payment facility provides businesses with instant cash without increasing the burden on the credit card or thrust to take new financial products like loans. In addition, this facility prevents businesses from taking a massive amount of credit in one block. When a business has enough cash flow, it can manage business expenses efficiently.
As business persons/retailers/merchants know the benefits of the Buy Now Pay Later Business model, a question arises ‘who provides the money to businesses on behalf of their customer’. BNPL providers do it.
Reputed BNPL providers, such as KredX, offer MSMEs and businesses the opportunity to increase their sales by 2x. Its tailor-made solution helps businesses get instant payment against the products sold. In addition, the simple registration and quick digital application process help companies to save time and continue operations without any delay.
The concept of an instalment payment in business is now new. However, when it gets the digital touch and ensures benefit to customers and retailers/merchants (as in the case of the Buy Now Pay Later business model), the concept becomes revolutionary. Buy Now Pay Later is that magic wand that retailers/merchants can use to increase sales, attract more customers, increase Average Order Value, and accelerate their businesses.