Buy Now, Pay Later (BNPL) technology is exactly what it sounds. It is technology that allows you to offer your customers the option of purchasing your goods or services without having the pay the full amount up front.
For the seller, the main attraction of Buy Now, Pay Later technology is to enhance the experience of your customers and being able to offer a variety of different payment options, increasing the chances that they proceed with a potential purchase.
Providers of both products and services universally note a marked increase in conversion rate following the implementation of a BNPL system.
BNPL has become the new norm in many industries but many companies are so busy that they haven’t had the chance to look into the required technology properly.
In this blog, we will look at exactly what BNPL involves, what technology you need to offer it, and the pros and cons of doing so.
How Does BNPL Work?
The concept of BPNL is simple:
- The customers likes what they see on your website or in person and decide they want to go ahead with a purchase.
- They proceed with the order and reach your point of sales where they are presented with one or more payment options.
- They choose BNPL, specifying the number of payments they will make, when they will make them, and how much they will be. These are normally pre-set by the provider, with several options given.
- A soft credit check is carried out to ensure the customer is eligible and can be relied upon to meet their payment obligations.
- The transaction is processed and the BNPL provider provides you, the merchant with credit for the full amount.
- The customer received their product/services in full.
- The customer makes the agreed payments until the full amount has been paid.
Why is BNPL Better Than Credit Cards?
You might be thinking that all this sounds pretty similar to a credit card payment, albeit payments can be split into instalments.
There are certainly similarities between the two, but BNPL is often a more attractive choice for the customer. Interest rates tend to be lower for a start, and the majority of BPNL providers only conduct a soft credit check before approving payments, compared to the hard credit check conducted by credit card companies that can have a negative impact on your credit score.
Benefits of BNPL
BNPL is fast becoming a must have for companies serious about maximising growth. Here are just some of the reasons that your company should be offering BNPL as standard on your products and services.
Avoid Being Left Behind
You know just how small the margins are in your industry between securing a sale and seeing it slip away into the pockets of a competitor.
Failing to offer BNPL could make all the difference, something that we see time and time again with our customers who report a significant increase in conversions at the point of sale once additional payment options are offered.
Simplify the Process
The fewer hurdles between your customer and their purchase the more likely they are to proceed and the fewer opportunities they have to change their mind.
Many online shoppers nowadays will simply cancel their purchase if they reach checkout and BNPL is not an option, whilst the complex process of setting up a credit card payment can be just as off-putting. In the modern age of online shopping, simplicity is key.
Increase High-Value Sales
BNPL not only helps you to secure more sales than ever before but can also increase the value of these sales. If a customer doesn’t have to stump the full amount up straight away, they will often be willing to go for a more premium product at a higher price point.
Splitting the payment up into smaller portions can make a big difference to your customers but as they are paying the BNPL provider, not you, you will receive the full amount up front.
How to Get Started with BNPL
To get you up and running with your BNPL infrastructure with minimum disruption to your business get in touch with Albapay today.
We will help you to set up BNPL at both physical and online point of sale with tailored services depending on the size of your company and the type of services that you offer. We integrate BNPL into the bespoke payment solutions we create for businesses across Scotland and have connections with the leading providers of BNPL loans across the nation, helping both you and your customers to get the best deal every single time.