Shoppers may have received an offer to pay in installments at checkout when they were ready to make a large purchase. This is a Buy Now Pay Later offer, and retailers are increasingly offering these rapid approval points of sale loans. Let’s figure out about this trend, how it works, and its consequences through this article.
What is Buy now Pay later?
Buy Now Pay Later (BNPL) is a sort of short-term financing that allows customers to buy purchases immediately and pay for them later, sometimes without incurring interest. BNPL arrangements, sometimes known as point of sale installment loans, are becoming a more common payment alternative, especially when shopping online.
Consumers may find BNPL financing to be easy, and retailers find it extremely convenient, especially those using ConnectPOS. This software provides online collection and in-store pick-up for customers. The audience will get satisfied when refunds and exchanges are also accepted in physical stores.
How does it work?
Buy now Pay later programs are not created equally. Each company has its own set of terms and conditions, but in general, the installment loans work like this:
- You make a purchase at a participating shop and choose to pay later at the checkout.
- If you're authorized (which happens in seconds), you put down a small deposit, such as 25% of the total purchase price.
- The remaining balance is then paid off in a series of interest-free installments.
- You can have payments through cheque or bank transfer; or from the automatic deduction of your debit card, bank account, or credit card.
This financial method may not be available on all purchases. Also, the amount you can borrow in this manner may be limited. However, with the advent of eCommerce in general, Buy now Pay later might be an appealing way to pay for smaller goods while shopping online.
What are the advantages of Buy now Pay later?
Customers can buy things and pay for them over a variety of terms, ranging from 3 months to multiple years, depending on the provider, enhancing the customer experience and removing friction.
They can get their thing even if they don't pay in full. Interest-free payments are available, and sign-up is significantly quicker than with credit cards.
When making online purchases, over 42% of Buy now Pay later users prioritize clarity of terms, and 39.1% prioritize the opportunity to track spending.
When consumers can spread expenditures over a long period of time and minimize their impact, they feel more comfortable making larger purchases. Of course, some people choose to save their money and wait to buy something. Customers nowadays, on the other hand, prefer immediate results to more traditional savings.
Improve customer relationships
Customers are more likely to return to shops that allow them to buy now and pay later. You're still paid in full and right away, so it's a win-win situation for both customers and businesses.
Maintain your competitiveness
Customers may opt to purchase elsewhere if you don't provide this service, especially when so many other businesses have been doing this.
Traditionally, only larger firms usually employ Buy now Pay later, but recently, this trend has become popular among small enterprises. So, if you haven’t found out the best solution for your business, call us now to get excellent advice for sales boosts.