The Buy Now Pay Later (BNPL) boom is here to stay, and it shows no signs of slowing down.
During the Coronavirus pandemic, instalment payments have soared in popularity along with an overall surge in online shopping, initially spreading out the cost of large purchases. So much that 1 out of 3 UK consumers used this payment method more frequently than they used to.
Furthermore, recent research shows that 9.5 million Brits will not shop at merchants that do not offer BNPL, and this number is expected to grow in the near future.
So what’s the benefit of using Buy Now Pay Later as a payment method at checkout to increase your revenue?
A growth opportunity for your business
Statista estimates that 3% of the global market is occupied by BNPL. The majority of the customers using BNPL are Millenials and Gen Z shoppers who want to stay debt-free.
These customers have grown up during the recession and are very resistant to credit cards. Having difficulty building credit and being wary of debt, they always turn to BNPL if they want to buy something they can’t afford today.
This is a low-hanging fruit opportunity for your business to reach these non-traditional customers and keep them loyal.
Increase sales and brand awareness
Customers usually avoid buying costly items online. Offering a BNPL payment option at the checkout will not only increase sales but also encourage repeat purchases. BNPL will keep customers coming back if they actively see this payment method is offered by your business.
To increase brand awareness, find a business to collaborate with that will make you more visible to these demographics. You should align your brand with their “coolness factor” or benefit from it.
Meet today’s consumer demands post-Covid
When it comes to BNPL purchases during COVID-19, clothing has been the most popular choice. In addition, BNPL was the preferred payment method for big-ticket items like electronics, furniture, appliances, and housewares.
Having been affected by the recent pandemic, consumers are now reluctant to invest in large purchases, as the economic recovery has been unequal, with variations among income and age segments. This is where BNLP can help reach these customers with little credit in the short term, as it’s an interest-free payment method.
Increase your average transaction value
Whether indulging or stocking up on essentials, your customers can often be surprised by the checkout total. To reduce the chance of your customers abandoning their basket or taking items out, offer BNPL, and you can increase their basket size at checkout.
The ability to spread the cost over several instalments gives them more purchasing power. In addition, allowing flexible payment terms influences the way consumers make purchasing decisions.
Over time, companies that offer consumers BNPL options will see their ticket sizes grow organically. It is possible that your business will benefit so much from BNPL that you may even refrain from using discounts and promotions in the future.
Boost Customer Lifetime Value (CLV)
Businesses can attract new Millennial and Gen Z customers, get more repeat business, and convert higher average basket sizes as a result of BNPL.
These positive experiences ensure that customers will return again and again and are crucial to customer retention. Moreover, once customers learn you offer a BNPL option, they’ll come back to you when it’s time to purchase their next big-ticket item.
Summing up
BNPL is quickly becoming as common as cash and credit cards, so offering it at your checkouts can be beneficial to your business over the short, medium, and long term.
Even when BNPL is more expensive than credit card payments, businesses have found that it is worth it. It attracts a wider range of consumers, including the less wealthy, opening up possibilities never explored before. Ultimately, consumers love this payment option, which means that retailers and banks must make them accessible to them.
