![]() It’s a more affordable way to finance purchases. The decline of credit cards presents an opportunity for alternative payment methods, including Buy Now, Pay Later. Since the beginning of the COVID-19 pandemic, customers have been slowly moving away from the dominance of traditional credit cards, with factors such as high-interest rates, declining credit limits and poorly implemented rewards programs exacerbating the issue. Why Do Consumers Like Buy Now, Pay Later?Īs BNPL grows in popularity as a payment solution, businesses must understand why consumers like BNPL and how they can best position themselves to take advantage of it. ![]() The retailer gets the credit and the customer gets to pay later.Ĭhoosing how and when they pay - without accruing interest - can increase spending power and allow customers to determine their financial schedules. This option usually involves the customer generating a QR code within their BNPL app, which is then scanned at the point of sale. Though most BNPL transactions are with online retailers, traditional brick-and-mortar retailers can also offer BNPL payment plans. Purchases are charged to their account with the opportunity to pay immediately in 30 days or via financing. In some countries, customers can order a physical or virtual BNPL card, allowing them to buy now and pay later from retailers who do not typically offer this option. However, here’s where things get interesting.Īlongside traditional payment options like credit/debit cards and PayPal, they’ll see options such as Pay with Sezzle and Pay with Klarna.Ĭlose to the fields to enter their card details, shoppers are presented with the option to buy now, pay later - opening up consumer purchase flexibility through several flexible payment options. They find an item they like, add it to their basket and click checkout. The Buy Now, Pay Later checkout experience.Ĭonsider the BNPL experience from the customer’s perspective. Finance It, splitting the cost of larger purchases into as many as 36 monthly payments.Pay Later Installments into 3 or 4 equal, interest-free installments.Though the exact details vary by country, most BNPL services offers customers three basic options: Participating merchants pay the provider 2–6% commission plus a fixed fee for every transaction. Either way, there are no extra fees or interest to pay, provided they pay on time. They typically make three or four equally spaced installment payments, taken directly from their payment card. ![]() With the rapidly growing implementation of BNPL solutions, retailers looking to gain an edge in the market are presented with a real opportunity - they just have to jump on it.Īt checkout, shoppers will typically have the option to receive their product right away but to pay for it either in full after 30 days or in smaller installments over time. dollars in 2019 but is estimated to grow by 1,200 percent by 2024. BNPL lending market was worth around a few billion U.S. These solutions are often offered to customers with little to no interest rates and hidden fees, meaning no additional cost to the customer. Partially due to this, the overall usage of credit cards in the United States has declined over the past several years, leaving an opening for different payment methods to emerge - one that BNPL took advantage of.Īs an alternative option to credit cards and other forms of financing, BNPL solutions were designed to allow shoppers to purchase their product and pay in a predetermined number of installments over time. The COVID-19 pandemic exacerbated many pre-existing issues of financial stress, including missed payments and shrinking credit limits. ![]() OtherEvents.Buy Now, Pay Later (BNPL) is a solution for point-of-sale financing that has grown increasingly popular in recent years, particularly among the younger generations.īNPL solutions emerged in the early 2010s to address the pain points around financing - namely, complexity and credit cards with high fees and APRs.Īs shown in a study by Insider Intelligence, these often exorbitant fees have led consumers to look elsewhere for payment methods, directly leading to the success of BNPL. Window.addEventListener("click", onClickHandler) Timeout = setTimeout(injectScripts, 20000) // default mobile loading delay If (window.pageYOffset > 0) injectScripts() // if page is scrolled down, it's a refresh If ( != null) clickEventNode = event.target Const regex = /document\.addEventListener\(DOMContentLoaded,\s*?function\(\)\s*?)) ![]()
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