{"id":7498,"date":"2021-10-20T07:44:13","date_gmt":"2021-10-20T07:44:13","guid":{"rendered":"https:\/\/kredx.com\/blog\/?p=7498"},"modified":"2023-10-26T05:50:55","modified_gmt":"2023-10-26T05:50:55","slug":"how-buy-now-pay-later-works-for-small-businesses","status":"publish","type":"post","link":"https:\/\/www.kredx.com\/blog\/how-buy-now-pay-later-works-for-small-businesses\/","title":{"rendered":"How Buy Now Pay Later Works For Small Businesses"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7498\" class=\"elementor elementor-7498\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2ab2fa4c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2ab2fa4c\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-16c8313e\" data-id=\"16c8313e\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7a424f35 elementor-widget elementor-widget-text-editor\" data-id=\"7a424f35\" data-element_type=\"widget\" data-settings=\"{&quot;ekit_we_effect_on&quot;:&quot;none&quot;}\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Cash flow maintenance and customer retention are key to the success of every business, irrespective of size. While established businesses easily get credit facilities to continue operation, most small businesses struggle to get the same due to eligibility complications or other factors. Thus without enough revenue, most small businesses cannot manage inventory efficiently, which disrupts sales, eventually leading to loss of customers.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">In such cases, if businesses opt for the <\/span><a href=\"https:\/\/www.kredx.com\/channel-finance\/sme-bnpl\" target=\"_blank\" rel=\"noopener noreferrer\">Buy Now Pay Later <\/a>\u00a0<span style=\"font-weight: 400;\">facility and integrate the service into their business, they can resolve these issues and maintain a strong customer base.\u00a0<\/span><\/p><p><i><span style=\"font-weight: 400;\">Wondering how? <\/span><\/i><i><span style=\"font-weight: 400;\">Let\u2019s see!<\/span><\/i><\/p><h2><b>Buy Now Pay Later in a Nutshell<\/b><\/h2><p><b>Buy Now Pay Later <\/b><span style=\"font-weight: 400;\">enables a customer to purchase a product and pay the amount later within the stipulated time. The products offered are usually small-ticket credit options that boost online and offline businesses. Here, buyers repay the purchase amount in an instalment payment. The repayment window can open for several months or days depending on the BNPL service provider.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The service or credit facility may seem beneficial only for buyers. However, businesses that have integrated the BNPL option benefit from it significantly.\u00a0 <\/span><i><span style=\"font-weight: 400;\">Read along.<\/span><\/i><\/p><h2><b>Benefits Of<\/b> <b>Buy Now Pay Later For Small Businesses<\/b><\/h2><p><span style=\"font-weight: 400;\">Having BNPL options available in a store (both online and offline) can help to convert visitors into customers. The other benefits include:<\/span><\/p><ul><li aria-level=\"1\"><h3><b>Attract New Customers<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">Introducing <\/span><b>Buy Now Pay Later<\/b><span style=\"font-weight: 400;\"> services into your business can help attract customers who previously hesitated to buy a product due to the high price. Now, price-conscious consumers can purchase premium products without any worry and convert their purchase payments into low to zero interest installments. Thus, businesses can expose their store to millions of customers. BNPL facility is certainly one of the best decisions for purchase over a credit card as buyers can reduce the cost of purchase by routing the payment through BNPL.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p><ul><li aria-level=\"1\"><h3><b>Increase Sales<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">When buyers get the opportunity to convert their purchases into instalment payments, they can purchase more without affecting their monthly\/weekly financial expenditure. Thus, when customers place higher order values, the total order value also increases as well as the sales.\u00a0 Increasing order values facilitated through the BNPL credit facility thus helps in business growth.\u00a0<\/span><\/p><ul><li aria-level=\"1\"><h3><b>Reduce Cart Abandonment\u00a0<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">As per data published by India Marketers, the cart abandonment rate in India is 51%. This happens due to a lack of convenient payment options. Also, in the case of online purchase, shipping fees are one of the biggest reasons which increase the price a bit higher. However, when businesses add the <\/span><b>Buy Now Pay Later<\/b><span style=\"font-weight: 400;\"> service, they can reduce the cart abandonment rate by introducing a convenient repayment option which ultimately helps in customer retention and business growth.\u00a0\u00a0<\/span><\/p><ul><li aria-level=\"1\"><h3><b>Maintain Cash Flow<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">By making a product purchase through the BNPL option, customers get their products instantly. On the other hand, retailers or merchants receive full payment the very next day. Therefore, retailers, merchants, or small businesses can continue operation and maintain cash flow efficiently as their money is not stuck with customers even though they will pay later.\u00a0<\/span><\/p><ul><li aria-level=\"1\"><h3><b>Manage Inventory<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">When a business opts for the BNPL financing option, it can manage inventory efficiently. The hassle-free payment option enables buyers to place orders at increased numbers; thus, product sale increases at a rapid pace. Retailers can restock products depending on the sale and popularity level. Thus, small business persons can avoid overstock or undertook issues by adding the BNPL credit facility option.\u00a0\u00a0<\/span><\/p><ul><li aria-level=\"1\"><h3><b>Boost Customer Lifetime Value<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">Customer lifetime value (CLV) refers to the entire time a customer invests in a store over a lifetime. The cost of living has increased over the last few years. In such times, keeping a customer engaged is the toughest job. Here, if small businesses integrate <\/span><a href=\"https:\/\/www.kredx.com\/buy-now-pay-later\/\">Buy Now Pay Later<\/a><b>, <\/b><span style=\"font-weight: 400;\">they can reduce the financial stress of customers and increase their purchasing power.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Therefore, it is clear that small businesses can benefit in multiple ways from BNPL service providers. However, the benefits increase when small businesses select KredX for credit facilities. This online platform helps small businesses resolve working capital issues, attract new customers and increase overall sales.\u00a0<\/span><\/p><h2><b>Working Method Of<\/b> <b>BNPL For Small Businesses\u00a0<\/b><\/h2><p><span style=\"font-weight: 400;\">In India, the formal credit facility is fragmented, hard to access, and stuffed with paperwork and complex processes. Contrarily, BNPL presents itself as a hassle-free and ready-to-use product. Whereas buyers get their products instantly, businesses that add BNPL services get the money instantly against the products sold. Then, the BNPL service provider collects the money from the merchant with whom a buyer shops.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Here is how <\/span><a href=\"https:\/\/kredx.com\/blog\/how-to-promote-a-business-online-without-spending-a-penny\/\" target=\"_blank\" rel=\"noopener noreferrer\">Buy Now Pay Later <\/a>\u00a0<span style=\"font-weight: 400;\">works for small businesses:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Customers buy a product through a participating merchant or retailer.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At the payment gateway, they opt for BNPL and agree to the terms and conditions of the BNPL service provider.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Then the order is placed, and buyers choose to pay the entire amount at a later date with the stipulated date. Remember, the merchant or retailer gets the amount instantly or on the very next day.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Customers can choose to pay the entire amount in low to zero interest amounts.<\/span><\/li><\/ul><h2><strong>Bottom Line<\/strong><\/h2><p><b>Buy Now Pay Later <\/b><span style=\"font-weight: 400;\">is a great opportunity for small businesses that face working capital issues. This credit instrument helps small businesses secure sales, increase customer base, and manage inventory procurement with any upfront payment. Further, small businesses that have low credit scores can get credit facilities in the BNPL ecosystem and thus grow their business.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Cash flow maintenance and customer retention are key to the success of every business, irrespective of size. While established businesses easily get credit facilities to continue operation, most small businesses struggle to get the same due to eligibility complications or other factors. Thus without enough revenue, most small businesses cannot manage inventory efficiently, which disrupts [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7499,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[556],"tags":[43,557,36,44],"class_list":["post-7498","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buy-now-pay-later","tag-bnpl","tag-business-credit","tag-business-loan","tag-buy-now-pay-later"],"_links":{"self":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7498","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/comments?post=7498"}],"version-history":[{"count":8,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7498\/revisions"}],"predecessor-version":[{"id":14449,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7498\/revisions\/14449"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media\/7499"}],"wp:attachment":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media?parent=7498"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/categories?post=7498"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/tags?post=7498"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}