The Buy Now, Pay Later (BNPL) concept has been around form any centuries. In the 1800s merchants were allowed to make purchases on items such
The Buy Now, Pay Later (BNPL) concept has been around form any centuries. In the 1800s merchants were allowed to make purchases on items such as farming equipment, pans and furniture by paying overtime in smaller instalments. This concept still exists today and even more so from the year 2010 when this concept really came into effect for eCommerce websites. Over the last couple of years BNPL has grown traction. Experts in the market have stated that they expect the BNPL market to be worth an estimated $3.6 trillion by 2030. So, what exactly is BNPL and why would this be beneficial to add as a payment option for your eCommerce website >
What is Buy Now, Pay Later?
BNPL is a flexible payment method that allows customers to purchase an items and then complete the payment at a later date. The payment is then usually taken in instalments. The process works by the merchant working with a BNPL provider, once the customer pays the initial instalment the BNL provider will cover the balance. It is then the customers who clears the remaining balance with the BNPL provider over an agreed period of time in instalments.
We believe that adding a BNPL option is beneficial for your eCommerce website,and we have listed our top 5 reason why below.
1. It can lead to increased sales
Customers may be willing to make a purchase but might not have the money for it initially. This could be for example a large order of a high value item that the customer is looking to obtain. The BNPL options make sit possible for customers to afford to purchase the items which leads to increased sales.
2. Increases the value of your average order
With the help of BNPL making items more affordable,consumers are more likely to spend more and make multiple purchase. As the payments can be split across multiple months, the monthly instalment makes it more comfortable for people to spend a small amount as opposed to a large single payment. Customers are more likely to add on additional products knowing that BNPL is an option.
3. Makes you more competitive
With more and more companies choosing to add the BNPL option to their eCommerce sites, this is fast becoming a favourite choice with consumers. A recent studied conducted found that 60% of customers has made a purchase under the BNPL arrangement. If you want to remain competitive and prevent loses potential customers, you should add BNPL to your site.
4. Reduces abandon cart rate
One report from a recent study has shown that 6% of customers abandon their shopping carts due to a lack of payment options. Some other customers may leave their carts because they can not afford to make the purchase at that price. With BNPL, your customers will now have an additional,more affordable way to make the purchase they want. Leading to an overall reduction in your short basket abandonment.
5. Increase customers lifetime value
Lifetime value refers to a the total amount of money a customer will spend during their entire relationship with your business. By implementing a BNPL as an option, you will help towards building trust with your client which can lead to a higher customer lifespan and increased purchase frequency.
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