Boost Your Business with BNPL
Have you ever been in a situation where you are browsing through an online store, and your heart is set on something, but you can't afford to buy it at the moment? Most buyers shop using credit cards, but about the ones that don’t have one? Many of them don’t even use credit cards, scared of the heavy interest rates. These are just some of the dilemmas the customers go through when they exit without buying anything.
So, is there a method for buyers to order everything in their cart without worrying about the final bill being too expensive? Yes, buyers can complete their purchases without hesitation owing to the buy now pay later (BNPL) method.
What does it mean for a business to offer a BNPL payment mode?
The ultimate objective of an online store is to encourage customers to click the "purchase" link, but there’s a big chance that it might lead to a big hole in your wallet. All of us move mountains to earn an income, so it’s only fair if you want to give a good thought about credit card balances before increasing them.
If you’re worried about missing out on sales, make sure that you provide your customers with a BNPL payment option. This way, they won’t necessarily need to make on hand purchases and may also buy products that wouldn’t otherwise fit their budget.
BNPL stats for India
- The Indian economy's foundation is its small companies, which are also essential to its development. They represent 30% of India's GDP and are integral to the informal sector.
- Consumer demand, following Goldman Sachs, will drive the Indian e-commerce industry to $99 billion by 2024. Small companies are facilitated in this transformation by B2B BNPL, which finances their online sales.
- Over the projected period, the usage of BNPL payments is anticipated to increase substantially, with a CAGR of 54.3% between 2022 and 2028.
Questions to consider before you integrate BNPL as a payment method in your business
Consider the advantages and disadvantages of the BNPL product to ensure it's the best option for you. It calls for open discussions about problems like prices, integrations, UX, accreditation and consumer ownership, transparency, and poor debt monitoring with BNPL players and your team.
What are the costs, and when will they be recovered?
It's crucial to comprehend how BNPL affects sales to estimate how much any associated payments will cost your company. Set a timeline to achieve the level at which BNPL begins to compensate independently. Make sure you are aware of this moment. If you're unsure if sales will cover the expense, your company might not yet be at a size that justifies it.
Which BNPL scheme will accommodate the pricing points of your products the best, and will you require some further accreditation?
BNPL can have many diverse features. Generally speaking, if a loan is interest-free and spread out over three or more installments, it is highly unlikely to be subject to credit regulation. Consider Tamara or Klarna. You may necessitate a pay-by-finance BNPL strategy, which entails applying for a credit license if you sell expensive products and want to provide financing over a longer time frame. Try and ensure your planning takes this into account.
Can you manage it if offering BNPL results in greater consumer profitability?
Buyers who prefer to test products at home before making a purchase may increase sales in some industries – for example, fashion. They may easily buy products in various sizes and shapes thanks to BNPL. Unwanted items may be returned without penalty or awaiting a refund, and a free return service increases the likelihood of this.
Is BNPL captivating to your intended consumer base?
According to BNPL operator Klarna, 70% of its users are members of Generation Z or Millennials. By researching your target audience, ensure your firm would profit from providing BNPL at the checkout.
The advantages of point-of-sale financing for eCommerce platforms
Buy now pay later, popularly known as "BNPL," has expanded rapidly in the eCommerce sector, and its reach has grown. Users of BNPL services may purchase items in installments or pay the cost at a later time with no added fees and, in most cases, zero rates of interest.
Greater rate of conversion
Customers leave their products over the internet for various reasons, but some do so due to money concerns.
Thanks to point-of-sale financing, customers in a problematic economic state can still buy the goods and products they want. Additionally, it enables consumers to benefit from current specials and discounts that your online store is doing.
A broader audience
Online stores can significantly reduce the cost of expensive transactions by spreading them out over 3, 4, 6, and more months. They can connect with a larger audience—which includes youngsters doing this.
Payments that are affordable and flexible for expensive goods
"Buy now, pay later" has the potential to have a significant impact on order success for online stores selling expensive goods like jewelry and appliances.
BNPL plans allow clients to pay in installments, giving retailers a more straightforward approach to getting their goods in front of buyers.
Increasing the average order value
A consumer's average sum when they complete an order is known as the Average Order Value (AOV). The AOV of several online stores increased by as much as 130% after deploying the "buy now, pay later" form of financing.
Enhanced customer satisfaction
More sales are generated by customer retention. When given more discretion over their purchases, customers are happy and content. Giving your consumers alternative payment and credit choices is an approach to give them more power.
The BNPL phenomenon has grown in popularity recently and is here to stay. It comes with several significant benefits for online shops, and as more vendors start to provide this choice, not having it may become a severe disadvantage.
To determine how BNPL can best assist you, visit a financial planner or hire an e-commerce expert. After completing all of these procedures, you'll be prepared to take advantage of all the advantages BNPL provides, including higher sales and increased customer loyalty.