For the past decade, buy now pay later (BNPL) has been steadily gaining traction. Then came COVID-19, and, like so much else in the e-commerce industry, BNPL went from a fad to a long-term consumer preference.
This is how the flexible payment solution works: Customers can choose to pay over time with a BNPL provider when they check out. This breaks down the actual cost of their purchase into a few installments spread out over a few weeks or months.
They make the initial payment at checkout, then click “Pay Now” to complete their order. While the buyer only pays the first installment, the Buy Now Pay Later provider covers the rest of the purchase, ensuring that the merchant is quickly making whole.
The trader then organizes and ships the order the same way as they would any other. This article will tell you about the benefits of buying now pay later.
Buy Now Pay Later Advantages:
Buy Now Pay Later has been slowly but steadily gaining market share for years. The number of BNPLs has increased dramatically since the outbreak. The advantages listed below explain why.
Today’s consumers are shifting away from traditional credit and alternative payment options. “What does financial success mean to you? Questioned millennials in a recent poll, and 60 percent said”, being debt-free.
Younger buyers, such as millennials and Generation Z, are becoming more skeptical of credit cards and their potential for debt accumulation. Credit cardholders are now, on average, around 50 years old. Instead, they choose BNPL and other flexible payment methods.
One of BNPL’s primary selling points to customers of all ages is its versatility, with 44 percent choosing it precisely because it gives more options than credit card payments.
In an Ever-Changing Retail Landscape, Accessibility is Fundamental:
When it comes to change, today’s customers want convenience. It is not enough for merchants to provide what customers want in a shopping experience; they must also simplify it. If BNPL was not an option at checkout, a third of BNPL customers claimed they would have abandoned their cart entirely.
Credit cards feature difficult-to-understand conditions, such as unexpected fees and variable interest rates. Shoppers are becoming more hesitant and skeptical of them.
BNPL’s offerings, on the other hand, are simple and basic. Shoppers pay for their items in four equal, interest-free installments over several weeks, not having a strict credit check. To put it another way, buy now pay later provides the convenience that clients expect.
Scanning from Website to Store with Ease:
Omnichannel is the way of the future. By the end of the year, 90 percent of retailers anticipate providing Buy Online/Pickup In-Store According to Retail TouchPoints, 87% plan to support mobile point-of-sale (POS) devices.
The year before, online digital wallet usage grew to 35%, as well as in utilization nearly doubled, according to Retail Insight. These patterns indicate that there is no longer a two-tiered checkout option. Consumers expect to check out your website, at your store, from their car, and through your Instagram shop.
Retailers require a solution that can effortlessly transition between various options in addition to the standard online and in-store options. That is BNPL for you. Several buy now pay later offers are designed to facilitate omnichannel shopping.
Synchronization of BNPL Elevators and AOV from the Convenience:
It provides shoppers with the omnichannel assistance it provides retailers. BNPL does a lot to drive the checkout experience forward. What does all of this mean in terms of return on investment? According to the data, everything is fine. BNPL boosts both e-commerce conversions and AOV.
The average Zip partner merchant sees a 20% increase in conversion and topline revenues, as well as a 60% rise in average order value. According to a CNBC Christmas report, half of the shoppers (48%) say BNPL allows them to spend 10% to 20% more than they could with a credit card alone.
According to a Forbes poll, that number might be as high as 40%. Shoppers may budget their purchases because Buy Now Pay Later allows them to pay in many installments over time. Despite popular belief, most BNPL customers have enough money in their bank account; to cover the entire payment at the time of buying, with about half having five times the amount cost of the item on hand.
Manage Money Easily:
Customers who buy at BNPL do so for several reasons they want to manage their money responsibly. They appreciate the ease of use. Alternatively, they may not have a credit card, as roughly 30% of Americans do.
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Furthermore, because the payments are broken down into smaller chunks, the total amount appears to be more reasonable. This could make customers more responsive to add-ons and upsells at checkout, raising e-commerce stores’ average order value.
More Purchases are Made as a Result of Increased Loyalty:
While more excellent conversion is enticing in and of itself, the advantages of buy now pay later do not end there. Repeat customer rates have increased by an average of 80% for Zip partner merchants. One out of every three BNPL customers utilizes it at least once a month, and 17% use it once per week more.
Buy Now Pay Later creates loyalty, both to the product and the brands who provide it, because of its ease, adaptability, and accountability. Repeat clients are precious to any retail firm, and we don’t have to tell you that. This group converts at a substantially greater rate has a three-fold higher AOV than first-time buyers and buys much more frequently. BNPL can help you keep these high-value customers coming back.
Applying a Buy Now Pay Later solution to your e-commerce checkout can help merchants in almost any industry achieve exceptional results. Discover how Zip’s flexible payment technology helps partnership merchants increase sales, AOV, and conversions.
Reach out to Mute Six’s DTC marketing specialists today if you’re hoping to use the most captivating advertising methods to achieve record-breaking outcomes with buy now pay later.