BNPL is a unique kind of short-term financing that allows consumers to make purchases and pay for them over a certain time period, usually with zero percent interest. BNPL is also commonly referred to as point-of-sale (POS) installment loans. Consumers can shop at any participating merchant and opt for BNPL at checkout. In case they are approved, they make a small down payment, such as 25% of the overall purchase amount. They then typically repay the balance amount in a series of zero-interest installments, usually over a short time period, usually a few weeks or months.
BNPL has become a popular payment option in recent years, especially among younger generations who prefer convenience and flexibility over traditional credit cards and personal loans.
Key Benefits Of BNPL
So how can buy now pay later help merchants increase their conversion rates? Here are some of the benefits of offering BNPL to customers:
- Increased customer satisfaction: BNPL can improve customer experience by providing them with a simple and fast checkout process, as well as a choice of payment methods that suit their preferences and budget. Customers who are satisfied with their shopping experience are more likely to return and recommend the merchant to others.
- Increased average order value: BNPL can encourage customers to spend more by reducing the perceived cost of their purchases and allowing them to split their payments over time. Customers who use BNPL tend to buy more items or higher-priced items than those who use other payment methods.
- Increased customer loyalty: BNPL can foster customer loyalty by creating a sense of trust and commitment between the merchant and the customer. Customers who use BNPL are more likely to repeat their purchases and stay loyal to the merchant who offers them this option.
- Reduced cart abandonment: BNPL can reduce cart abandonment by eliminating the friction and anxiety that customers may feel when they have to pay upfront or enter their credit card details online. Customers who use BNPL are less likely to abandon their carts or switch to another merchant that offers this option.
Key Benefits Of Multiple Payment Processor
Multiple payment processors are another way for merchants to enhance their conversion rates by catering to different customer segments and preferences. Multiple payment processors allow merchants to accept various payment methods, such as credit cards, debit cards, net banking, wallets, UPI, etc. By offering multiple payment options, merchants can:
- Reach more customers: Multiple payment processors can help merchants reach more customers who may not have access to or prefer certain payment methods. For example, some customers may not have credit cards or bank accounts, while others may prefer using digital wallets or UPI for convenience and security reasons.
- Reduce payment failures: Multiple payment processors can help merchants reduce payment failures by providing them with backup options in case of technical glitches or network issues. For example, if one payment processor fails or is slow, customers can switch to another one without leaving the merchant’s website or app.
- Increase customer trust: Multiple payment processors can help merchants increase customer trust by showing them that they care about their needs and preferences. Customers who see that merchants offer multiple payment options may feel more confident and comfortable about making purchases from them.
In conclusion, BNPL and multiple payment processors are two effective ways for merchants to enhance their conversion rates by providing customers with more convenience, flexibility, and choice in their payment methods. Merchants who adopt these digital payment solutions can benefit from increased customer satisfaction, loyalty, spending, and retention.