It is essential for you as a company owner to provide your consumers with a hassle-free transaction experience, regardless of whether they are making their purchases in-store or online. Customers are given the ability to select the mode of payment that best suits their needs when many options are presented to them.
One strategy for making the purchasing process simpler for your clients is to provide a “buy now, pay later” (BNPL) payment method.
Over the past few years, BNPL services have seen a rise in demand from a growing number of customers.
How does buy now, pay later work?
The client, the merchant, as well as the purchase now, pay later supplier are the three parties involved in the buy now, pay later transaction. When a consumer buys the product, the service provider makes a complete payment to the retailer, deducting any applicable fees. After then, the client is responsible for making periodic payments to the service provider.
Buy now, pay later transactions can cost retailers anything from 1.5 percent to 7 percent of the entire purchase amount made by a consumer. This is in comparison to the 1% to 3% that is typically charged by most debit and credit card companies. Here are factors to consider-
1. Merchant fees
Charges are levied on both the client and the merchant when BNPL services are provided by financial institutions like banks and credit providers. However, the fees associated with BNPL systems are typically greater than those associated with traditional payment methods. These fees typically range from 2% to 6% of the total amount that is being purchased.
2. Regional availability
It Is important to check the geographical availability of the BNPL operator you pick before making a decision so that you can ensure that the provider is accessible to clients in the locations to which you sell and transport your products.
3. Client experiences
Customers have the ability to purchase precisely how they choose, thanks to the Buy Now, Pay Later service, right proportionate to the lack of money that they pay upfront within this initial payment. It is the epitome of a shopping experience that is adaptable, centered on the consumer, and gives shoppers the freedom to buy on their own terms.
BNPL makes stress-free, convenient online shopping available to customers with varying degrees of buying power, regardless of the size of the products or quantity of the purchases they are interested in making. It broadens the appeal of online shopping by enabling customers to make purchases wherever, anytime, and with whatever kind of smart gadget they happen to have on hand. Retailers may increase customer satisfaction and brand loyalty by providing a service that is becoming increasingly important to their customers.
4. Integration difficulties
There is a workaround that has to be done in order to incorporate the “buy now, pay later” way of payment into the standard flow of your shop’s checkout procedure. It is necessary to utilize specialized equipment and technology, both of which can frequently contribute to an increase in the costs spent by the merchant.
Financing specialists advise going with such a third-party BNPL because of the cheaper fees offered by these institutions in comparison to traditional banks.
5. Security
When working with a third-party service provider, one of the most important things you can do for your company is make sure they have the satisfaction of your clients as their first priority. This encompasses everything from the overall experience that the consumer has to the fraud prevention policies that are currently in place. When a fraudster is successful in taking over the account of a consumer on an eCommerce platform, they are able to utilize the information that was fraudulently obtained to their advantage when dealing with a BNPL provider.
Conclusion
It may be incredibly helpful for an online retailer to offer customers the option to “Buy Now and Pay Later” as one of their payment choices. Providing this choice demonstrates that you are prepared to fulfill the demands of your clients, which in turn might lead to an increase in the number of customers who purchase from you on a subsequent occasion.