Elly Financial Technologies Limited
54 Poland Street, London, W1F 7NJ
54 Poland Street, London, W1F 7NJ
The Buy Now, Pay Later service is a relatively new phenomenon even in 2022. Nevertheless, it has become a popular payment method worldwide. Online purchases using buy now pay later services are growing at a rate of 39% a year, in fact, nearly 9.5 million UK citizens avoid buying from retailers that don’t offer BNPL options at the checkout. The number of UK brands offering buy now pay later options is also increasing, as it represents a viable way to pay for goods and services.
The concept of BNPL does not only allow consumers to pay for their product with a delay and with no interest or hidden additional fees. This also in turn benefits merchants in being competitive, attracting new customers, increasing customer loyalty, and boosting sales by up to 30%.
The option of buy now, pay later is perfect for the younger generation, specifically for those who don’t have or don’t want credit cards and those clients who use mainly digital currency as payment methods. According to Statista, younger generations in the United Kingdom are more likely to use BNPL than the older generation. Millennials use the payment options the most, while 50% of Gen Z uses BNPL regularly. This trend does not come as a surprise since BNPL providers tend to be highly active on social media.
According to Finder, London has the greatest percentage of buy now pay later users in the UK, with 48% of Londoners using this payment method. This is followed by residents of the East Midlands (40%) and the South East (38%). The region with the lowest percentage of BNPL users is East England, with only 31% of residents ever using BNPL services.
In this article, we are going to look into what “buy now pay later” is, how it works, and its benefit in your business.
What Is Buy Now Pay Later?
The payment option of BNPL has been tagged with different terms. You may be familiar with some of them might include shop now pay later, point of sale loans, installment payments, deferred billing, or pay in 4. Whatever these may mean, they suggest one thing: consumers can purchase an item, the merchant delivers it, and the customer pays for the product over time.
The Buy Now Pay Later Term
Buy now pay later is a type of short-term financing strategy that lets customers make purchases and pay for them at a future date or over some time without interest rates. BNPL has become increasingly popular, especially for people who were buying things and shopping online during the pandemic. Using buy now pay later financing can be convenient for buyers but there are also some downsides that consumers need to be aware of. Payments are made in installments of three, six, or twelve months depending on the platform until the total value of the purchase is paid in full.
This means as a merchant, you still get paid in full, when partnered with a financing company, which is a win-win situation for both parties because you can still sell your products or services immediately.
How Does It Work With Payments?
If you are deciding on adding the BNPL option to your payment method selection, you first need to understand how it works, integration requirements, and how to manage the checkout experience. Each Buy now pay later platform has its conditions but generally, they operate in the same manner.
You can opt into the buy now pay later method by going through purchase using a retailer that offers this option at check out. Once approved, you send a percentage of a down payment in crypto which is usually about 25% of the purchase you want to make. Customers can then pay off the remaining amount required over a while with zero interest fee.
Although using a credit card involves delayed payments, it is still a bit different from making a purchase using the crypto BNPL option. If you initiate a transaction using a credit card, you can only pay the minimum amount assigned to the card each month. Interest is also added to the recurring monthly fees to be paid in full unless you opted in for a card with a 0% introductory APR. When compared to BNPL platforms, they don’t ask for interest rates, they rather have a fixed schedule designed for repayment. This can vary from weeks up to a few months. Buyers are obligated to send a fixed amount of assets to pay each time and the amount itself is constant. It looks more like a consumer loan.
More Long-Term Benefits For Your Business
Just as we mentioned above, having choices for customers to pick from is always recommended, if you retain new customers who visit your online business or your physical store. Consider adding the buy now pay later option to enjoy these benefits:
Increase in Sales
Most of the time, customers might wish to purchase your products, but they just don’t have the money to do it yet. By integrating the BNPL method, you will turn window shoppers into loyal paying customers.
Attract New Customers
Offering the buy now pay later option is a good way to attract customers who aren’t yet aware of your services or products and clients who aren’t yet able to pay for more expensive items. This payment method also attracts many buyers because of its non-interest rate as well. It’s a way more desirable option than using credit cards, believe it or not.
You created an awesome publicity package for your store, and you have a lot of visitors, but no one is buying yet. If you opt-in for Buy now Pay later, purchases can be initiated now with less commitment giving your customers an increased trust with a better shopping experience.
Other businesses and stores are already offering installment payments. With this fact, it is estimated that by 2025, BNPL payments will increase to about $680 billion in transactions worldwide. It is not a discussion of if, but when the buy now, pay later payment method will overtake the world of commerce. Since the pandemic, this option of payment has seen a large increase in adoption. Being left behind in a digital world can be devastating for any business. Be sure to make paying for your products or services more financially friendly to your potential clients.
Elly integrated Laybuy’s BNPL app
We want to make sure that Elly’s merchants have the best user experience on the market, which is why Elly integrated Laybuy’s BNPL application into its Smart Elly POS device. Elly’s merchants can now offer their customers a simpler way to pay, in 6 weekly, interest-free installments whilst they receive complete payment immediately. With this approach, merchants compete with lower price points, and shorter payment cycles, while gaining long-term customers.
Laybuy’s payment option increases the merchant’s average order value, boosts conversion rate, and grows customer acquisition. The BNPL option is user-friendly, risk-free, and offers instant payments.
Elly POS provides the widest payment method selection on the market
Giving your visitors and potential customers various payment options to choose from is important for enhancing customer experience and helping turn window shoppers into paying long-term consumers. A convenient payment method is plausible to give your business more sales, and brand trust.
Elly’s holistic point-of-sale solution boasts multiple payment options from debit and credit cards to BNPL, digital, and crypto payments.
If you’re thinking about growing your business by accepting various payment methods on a single smart payment system, visit elly.com.