We have come to the final topic of Series #1 of eCommerceFest 2021, ‘How Buy Now Pay Later Is Driving Growth for eCommerce Retail.’ If you missed the preceding topic, click here topic of Omni Channel Ecommerce and Retail to read the blog post.
How Buy Now Pay Later
Payment methods are improving and evolving as e-commerce continues to expand across the world. Retailers and e-commerce merchants are attempting to find payment options that are seamless and convenient for their clients to ensure their complete satisfaction.
Buy Now, Pay Later (BNPL) is a new payment model that aims to benefit and make shopping easier for both businesses and customers. This session will give you a better understanding of the BNPL model.
Let’s look at the key takeaways of this session.
1. What is Buy Now, Pay Later (BNPL)
From the consumer’s standpoint, How Buy Now Pay Later is fairly easy to understand. This payment solution enables them to divide their purchases into three or more interest-free monthly installments at no extra cost.
However, from a merchant’s standpoint, it’s all about an omnichannel conversion solution that aims to convert more visitors into consumers.
2. Installment Payment Plan (IPP) vs Buy Now Pay Later (BNPL)
The IPP business model revolves around making money from late payments. BNPL, on the other hand, is better for payment when customers pay on time.
BNPL is compatible with all banks and may be used in addition to the car-based method of payment. It is not connected to a single institution, allowing you to work on a variety of platforms.
IPP is typically used for high-ticket commodities. However, you do not need to purchase high-priced items to use BNPL because eCommerce does not have very high ticket pricing.
While BNPL is aiming for a younger market, between the ages of 26 and 35, IPP is aiming for a more mature credit card-carrying demographic.
3. Why BNPL?
From the consumer’s perspective, BNPL is a transparent payment method because there is no processing fee and no compounding interest, making it very transparent. Another advantage is that How Buy Now Pay Later can help consumers improve their cash flow and monthly budget.
The fundamental proposition is to decrease the impact of price by assisting customers in breaking down their purchases into multiple interest-free monthly payments, allowing them to better manage their finances.
The benefits for merchants, on the other hand, are that BNPL can assist merchants in increasing conversion and basket size. BNPL can assist merchants in lowering acquisition costs and driving traffic to their website, which can then be converted into consumers.
At the same time, BNPL improves customer retention by encouraging them to spend more money with you over time. After a while, BNPL not only helps you save money on attracting new clients but also helps you keep your existing ones.
4. Increase sales among the young generation
Businesses can use Buy Now, Pay Later (BNPL) to assist them to increase sales among a younger demographic.
It allows clients to split their payments into monthly installments, making it easier for younger customers to buy higher-priced items. BNPL isn’t just another payment option; it’s also a way to boost news sales and reach new audiences.
5. Maximising BNPL experience
To provide a better customer experience while using BNPL, you must first understand what you require. To comprehend this, you must do your due diligence and begin to consider the experience your customers will have.
You must ensure that customer service is great because they are your clients and their money, as well as their ability to pay, therefore you must have complete control over the customer experience.
Tell the people
If you’re trying to use BNPL in your eCommerce shop, you’ll need to let your customers know that you’ve added a new payment method that will make purchasing much easier and more convenient for them.
If you want to increase conversions, let your clients know that you provide a flexible and simple payment option.
Be listed in BNPL partner’s store directory
When you’re ready to integrate BNPL into your eCommerce site, start thinking about how the BNPL partner will drive traffic and increase your brand’s visibility.
Because the majority of BNPL partners offer a store directory, you must ensure that you are listed in it. However, different BNPLs provide different services; for example, some BNPLs push traffic to your site, while others drive traffic to their site and convert the traffic
The Bottom Line
eCommerce website and digital growth are accelerating, and mobile devices are being used by large populations. The rapid advancement of digital technology has resulted in a shift in consumer preferences.
There are a variety of payment methods available to meet the preferences of customers and increase the conversion rate of businesses. BNPL is the current payment method trend that is gaining traction in the eCommerce industry around the world
In this session, the speaker, Sean Tan, General Manager, Hoolah Singapore had shared rich information about the concept of How Buy Now Pay Later, offering an insight into the BNPL industry and consumer trends, as well as why retailers and consumers are embracing the BNPL model for their businesses and purchases respectively.
Watch the full video of this session to know more about BNPL!