Almost a year into the pandemic, it’s clear that the way we both shop and pay has completely shifted. Once a nice to have, Buy Now Pay Later(BNPL) has fast emerged as a must-have payment method for consumers across the world as they seek more flexible and convenient ways to pay.
The growing relevance of alternative payment methods like BNPL signals the importance and urgency for retailers to adjust their offerings in line with rapidly changing consumer payment preferences.
Worldpay forecasts that the BNPL payment platforms will have a market share of nearly 3% of global eCommerce spend by 2023. Moreover, an estimated $680 billion will be spent by global consumers using BNPL over eCommerce channels in 2025.
Payflex outlines 4 of the key benefits of incorporating flexible payment methods like BNPL for merchants:
Payment preferences are no longer one-size-fits-all. Offering a wide range of payment options at checkout enables consumers to select the ones best suited to their particular circumstances and priorities. It will also help to increase conversions as it enables shoppers to purchase items they’d normally not be able to afford. This increases the likelihood of conversions and reduces the pain point of cart abandonment.
BNPL reduces the upfront cost, making the purchase more manageable by paying a quarter of the price and spreading out the cost in four interest-free installments over six weeks. Merchants who have incorporated Payflex into their stores have seen their sales increase by as much as 30%.
Higher Average Order Value
Consumers generally spend more than they would have with BNPL due to the ability to spread out payments over time. In addition ,the fees and interest associated with traditional payment methods do not apply. Payflex merchants have seen their average order value increasing by up to 70%.
Better customer experience
Today’s consumers have come to expect personalisation and choice at checkout. Offering payment choice and flexibility plays a significant role in improving customer experience. In addition, empowering customers to pay the way they want helps build stronger relationships between the merchant and consumer. Payflex merchants have seen an up to 80% increase in consumer return rate when implementing BNPL as a payment solution.
Reach New Customers
More consumers than ever are looking for new ways to pay that give them more control and less credit risk. By incorporating different payment methods, you’re able to significantly broaden your reach and connect with as many shoppers as possible. BNPL is essentially a budgeting tool that empowers consumers to use their own money in a responsible and safe way.
In addition, merchants that offer flexible payment options will appeal to consumers who don’t want to go through the steps typically involved in applying for traditional payment methods.
The bottom line of BNPL
As we adjust to the new reality of the post-pandemic normal, shoppers are viewing payment methods through a very different lens. More customers than ever before are now online, looking for products or services that suit their specific needs. Keeping shoppers satisfied is more important than ever. Offering payment methods your customers want to use is one of the most vital elements of the customer journey and one of the most effective ways to improve your conversion rate. It is therefore vital that you offer a wider array of payment options including BNPL that align with consumers priorities at checkout. Especially if you wish to remain relevant and competitive in a highly crowded eCommerce marketplace.