Buy Now Pay Later leads revolution in payment options for retailers
The growth of eCommerce has brought with it new payment methods that have given consumers a wider range of possibile ways to pay for their purchases.
Recently, more and more BNPL (Buy Now Pay Later) solutions have been appearing that give customers the possibility of splitting the payment without having to resort to bank financing or credit cards.
This payment method offers a lot of flexibility to consumers and multiple advantages for retailers. A study by Clearpay found that 42% of Gen Z and 69% of Millennial shoppers are more likely to purchase items if they can split the payment, which directly leads to an improvement in conversion rates. But there are other advantages that may pass unnoticed at first:
- Increase of the average ticket between 10% and 40%;
- Reduction of shopping cart abandonment due to shoppers feeling they have “spent too much” when they see the final amount of the purchase;
- Customer loyalty;
- Better knowledge of the customer that will allow them to better segment campaigns;
- Better appreciation of the brand as they feel that they put themselves in the customer’s shoes.
From a financial perspective, the key benefit for retailers is that they do not take on the credit risk due to customers not paying as that risk is assumed by the deferred payment solution that pays the amount to the retailer at the time of purchase.
Omni-channel comes to BNPL
Many deferred payment solutions are focusing their efforts on supporting retailers in their omnichannel strategies by offering the possibility of deferring purchases both online and in their physical stores.
BNPL is here to stay and according to forecasts, it is estimated that by 2025 the volume of deferred payment transactions could reach $680 billion worldwide.