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When it comes to business, customer convivence is huge! From easy to navigate websites, to a stress-free checkout process- every detail matters. So, with a rise of 3rd party companies wanting to provide interest-free installments for your potential customers, it makes sense to consider offering this payment alternative. We’ll explain what buy now pay later financing is, if your business should offer it, plus how to get set up with this payment option if it is something you are interested in.
What is buy now pay later?
Buy now pay later (BNPL) is a payment solution for customers that has exploded over the last couple years. BNPL is similar to a credit card where the total charged for a service or product is broken down into several smaller, interest-free payments over time. The downside for opting to use BNPL as a customer is it requires an initial down payment, and the lender doesn’t convey information to the credit-reporting systems- but ultimately this can be great for bringing in new or potential clients who may be hesitant to use credit cards or have less-than-perfect credit history.
Should your business offer BNPL?
Depending on what type of business you have, and what your goals are, buy now pay later may or may not be for you- so here are some of the pros and cons to consider.
Pros
· Increased sales revenue: offering financing for customers means a higher average order value and better conversion rates- translating to more money overall for your business.
· Paid in full immediately: as the merchant, you receive payment funds right away even though the customer pays over a period of time.
· Boosted customer base: smaller payment options make buying more affordable, and that affordability widens your consumer base.
· Can be integrated both in-store and online: which is extra convenient for potential customers who fall in love with your brand.
· Several BNPL platforms to choose from: including Klarna, Affirm, Afterpay, Sezzle, Paypal, Apple Pay, and many more… which means there’s a BNPL option that will fit with your business.
Cons
· Higher merchant fees: because the BNPL doesn’t charge the customer directly, they have to get paid somehow- and that is through fees paid for by the business. Each provider can charge different fees so it’s important to shop around!
· Not every business qualifies: there are conditions for who is able to use this payment alternative technology, and some types of ventures are restricted all together (think tobacco, gaming, etc.), which means not every business can qualify.
· Integration can be challenging: without the specialized tools and technology, integration can be a real challenge. It’s important to find a qualified merchant service provider, like Align eCommerce, to make sure your shop’s checkout process remains as smooth and easy as possible.
How to get your business set up with a BNPL option?
Because all BNPL providers can vary, the most important step is figuring out which company will be best for your business. Look for options that can be linked with your point-of-sale system, what they do for the customer, and most importantly- choose someone who you trust to represent your business. Once you’ve decided who to utilize, you’ll sign up directly through the BNPL company and then your merchant service provider should be able to connect it with your current payments system.
If you’re not sure which BNPL company to go with, who is best to use with your current system, or if this is something you should even sign up for, reach out to Align eCommerce! We’ll make sure all your questions get answered so you can feel confident with your decision. At Align- we’re here to help!
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