In today’s digital markets of convenience, customers prize flexibility in all its forms – with next-day delivery slots and curated subscriptions popular across industries. But one area of flexibility is gaining new importance in a world of financial volatility for the average home: payment. Here we’ll look at one of the main methods of offering customers flexibility in their payment for an item or service, and the benefits it can bring to you.
What are BNPL Schemes?
BNPL stands for Buy Now Pay Later; BNPL schemes are mechanisms by which consumers can offset payments for a product or service by a pre-arranged period of time, or by paying in instalments. There are many third-party services that can administrate this kind of process on your behalf, absorbing the risk of non-payment with the caveat of introducing their own interest rates to purchases. However, it is also possible for you to implement your own version of a BNPL scheme, on your own terms and customized to your product. Here are some of the chief reasons why doing so could benefit your business.
More Overall Purchases
Offering a delayed or incremental payment scheme on your online storefront has the simple effect of increasing your total sales. The upfront cost of an item might deter certain prospective customers, especially those who might not be able to purchase until their next paycheck, while offering a BNPL system will make them more likely to go through with a purchase. BNPL schemes enable you to eliminate barriers to purchase without losing out on profits – beyond the initial hit to cashflow when first implementing the scheme.
Improved Customer Experiences
By instituting an intuitive BNPL system with customizable instalments and dates, your business is improving its customer experience. Having customer payments scheduled via an open banking platform can remove the worry of missing payments on your end, automating the process and ensuring regular cashflow spread across their repayment period. Not only that, but customers are more likely to return if your scheme is generous and smooth to arrange.
Higher Order Values
Allowing customers to spread the cost of your product across a given time period can also have another kind of positive effect on purchasing patterns, beyond increased overall customer purchases and retention. The value of an average customer order is also likely to increase, as customers either purchase more items or opt for higher-value offerings. With price no longer a short-term issue, customers can afford to upsell themselves – resulting in better revenues for your business.