5 Reasons Businesses Should Offer Buy Now Pay Later
Thu Aug 04 2022
Nowadays, customers are often looking for options before they make a decision on their purchases–from how to buy, where to buy, to how to pay. Payments play a key part in the customer’s shopping experience. Having multiple payment options available is one of the factors that affects customer decision making.
One of the payment options that is becoming popular that you might want to consider is Buy Now Pay Later (BNPL). It’s a short-term financing tool that allows customers to buy products and pay by installment without using a credit card.
BNPL commonly attracts younger customers in the market, such as middle-class millennials and Gen Zs who hustle to earn and purchase items. BNPL is a modern version of deferred payment without using a credit card, giving young customers the ability to pay by installment.
BNPL also enables unbanked Filipinos to have payment options aside from paying in cash. In fact, according to 2020 Banko Sentral ng Pilipinas data, only 48% of the country's adult population has a bank account. This could mean BNPL is a practical option for many Filipinos who like being able to shop without going through the stringent credit checks by banks.
Here are the reasons you should offer Buy Now Pay Later:
1. More Affordable for Customers
Unlike credit cards, BPNL, specifically Plentina, charges a low service fee and doesn't charge monthly interest rates. They also offer more payment flexibility. This means your customer can afford most of your products, especially the big-ticket items such as laptops, smart phones, and high-end appliances.
💡 BNPL empowers customers to make purchases.
2. Turns Browsers to Customers
Ever wonder why some customers would browse your product pages and just leave without purchasing anything? It could be because your payment options are limited to traditional methods. BNPL can do wonders on converting page visits to actual sales, because you are offering them payment flexibility – something they crave for items they wish to purchase.
💡Payment flexibility improves client satisfaction and thus improves retention and loyalty.
3. Improves Customer’s Purchase Experience
Offering your customers a more flexible payment option with BNPL means empowering them. When you empower your customers, you give them control over their purchasing decisions. And when your customers are empowered, they are happy.
💡 Great customer experience equates to more sales.
4. BNPL is a Growing Market
According to this Q4 2021 BNPL Survey, BNPL payment in the Philippines is expected to grow by 109.7% on an annual basis to reach US$ 803.5 million in 2022. As the BNPL industry continues to expand across the country, BNPL firms are also expanding their product offerings across the Philippines to garner more market share in the country.
As BNPL is offered by almost every single online business, it is supported by many payment service providers.
💡 BNPL influences demand by offering flexible payment options.
5. It’s Not Just Online
While BNPL started as an online form of payment, it can also be integrated to your POS in your physical store. A good BNPL service provider can offer the best of both worlds for your business to maximize its benefits to your sales funnel.
💡 BNPL applies not only to e-commerce but also also to brick and mortar establishments.
These are just some of the reasons BNPL should be part of your business strategy. Not only will it help you keep cash flow coming, but your customers can also turn to options that suit their current finances.
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