Buy Now Pay Later (BNPL) is a popular concept across the globe. Its popularity and importance multiplied during the COVID-19 pandemic, where consumers had less cash in hand (due to economic slowdown), but the demand for the essential products remained the same. High demand for products and the necessity of purchasing in a contactless manner shed light on the importance of BNPL. Though it seems that BNPL only offers benefits for customers, in actuality, the benefits of Buy Now Pay Later are the same for customers and merchants. Merchants offer this advantageous payment facility only because they can secure similar kinds of benefits from the BNPL program. This piece thoroughly talks about the benefits of Buy Now Pay Later for merchants. Read along.
Buy Now Pay Later: An Overview
Many e-commerce platforms offer customers the Buy Now Pay Later service, allowing them to purchase and receive products without paying anything upfront. Instead, buyers can repay for that product at a later date with zero to low-interest rate. On the other hand, merchants receive payment in full for the products sold and need not wait for their customers to pay. Usually, merchants use a third-party BNPL provider as a payment option who pays on behalf of the customers and receives payments from customers from a future date. Read to know about the benefits of Buy Now Pay Later For Businesses.
Benefits Of Buy Now Pay Later For Merchants
Below are discussed the benefits for BNPL merchants can enjoy by integrating the BNPL at checkout:
Merchants offering multiple payment options, including BNPL; encourage customers to purchase more products. Customers usually tend to purchase products only when they are comfortable with the payment process. When customers get the advantage of splitting payment as per their convenience, they choose and shop for more than one product, even if it is a bit pricey.
Reduced Cart Abandonment Rate
As per a Mastercard study, integrating BNPL at checkout can reduce the cart abandonment rate by 35%. Most shoppers abandon carts, stating they are just window shopping, but that’s not always true. BNPL can overcome these issues efficiently. For instance, if shoppers abandon carts for reasons such as they could not find a suitable payment process and the products being expensive, BNPL will be able to reject every reason as consumers can pay at their convenience and split up the price of expensive products into affordable payments.
Boost Customer Lifetime Value
When customers purchase from an online platform repetitively that offers a BNPL payment facility, it means the merchant has been able to satisfy a customer's needs. In addition, returning to a platform for purchase shows the merchant has been able to gain the trust and loyalty of customers by offering flexible repayment terms. When customers thus return to the same shopping platform to purchase, they can easily increase Customer Lifetime Value.
Increase Average Order Value
The more customers order products individually, the higher the amount and the better for a merchant, i.e., business. Customers can shop more when they can enjoy an affordable repayment process and spread out payment by opting for BNPL at checkout. The flexibility of spreading out the payment and no upfront payment thus encourage buying more. When each customer understands the benefits of BNPL and shops more, the average order value increases, and merchants get more out of every customer.
Merchants looking for third-party BNPL providers can rely on KredX, increase the average sale per customer by up to 40%, and improve the cart conversion rate by up to 30%. In addition, the hassle-free digital process and quick API integration will enable merchants to integrate BNPL as a payment mode at checkout and enjoy the benefits of this program.
Bottom LineIntegrating BNPL at checkout will help merchants increase sales and boost the performance of their businesses. As the economy is still at a recovery stage after the several waves of the COVID-19 pandemic, this flexibility in payment certainly acts as a boon for merchants as well as for customers. No wonder, Buy Now Pay Later for merchants will become a mandate in coming years.
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