In today’s economy, small businesses are always looking for ways to attract and retain customers. One way to do this is by offering buy now pay later (BNPL) services. By offering this type of payment option, small businesses can give their customers the flexibility they need to make a purchase. In addition, buy now pay later services can help businesses build customer loyalty and increase sales.
According to a recent study, nearly 60% of small businesses now offer some form of buy now pay later option to their customers. This is up from just over 50% last year. This trend is being driven by the growing popularity of alternative financing options like Klarna and Afterpay.
According to a Credit Karma survey from 2021, 44% of Americans have used some form of the popular buy now, pay later service. This same study found that home and furniture goods were the most commonly bought items, with electronics, apparel, and auto spend ranking close behind.
Advantages of Offering Buy Now Pay Later Services
There are many advantages of offering buy now pay later services for small businesses. Let’s review them:
First, this type of payment option can help businesses attract new customers. By offering a buy now pay later option, businesses can expand their customer base to include people of all ages, from Gen Zs all the way to Baby Boomers. Many consumers are looking for flexible payment options, and by offering buy now pay later services, businesses can show that they are customer-focused and willing to meet the needs of their customers.
Shoppers are becoming more and more flexible in their payment options, preferring the ability to buy something when they want it and pay for it over time. This makes products much more affordable for those on a tight budget, especially when it comes to non-essential items or luxury goods that would normally be out of reach. By offering a more flexible payment option, small businesses attract new customers and make existing ones feel comfortable about buying on the spot or trying new products.
Today, people want options when it comes to paying for things online. A recent survey by Finder showed that 9.5 million Brits will avoid buying from retailers if they don’t offer Buy Now Pay Later options. And a Harvard Business Review reported that most shoppers decide how they are going to pay for their purchases before they reach the checkout. So offering a range of payment options is crucial if you want to attract and retain customers these days.
In addition, buy now pay later services can help businesses build customer loyalty. Once a customer has used this type of service from a business, they are likely to remember the business and come back in the future when they need another product or service that the business offers. Moreover, word-of-mouth referrals from satisfied customers can help a business attract even more new customers.
No Financial Risk
When a shopper chooses to go with the Buy Now Pay Later option at checkout, instead of the retailer having to deal with any type of financial risks or payment defaults, that burden is transferred and assumed by the BNPL credit provider. Immediate payment in full is received by the seller from the credit provider.
Finally, buy now pay later services can help businesses increase sales. When customers have the option to purchase a product or service now and pay for it later, they are more likely to make a purchase. This is because they don’t have to worry about coming up with the full amount of money upfront. As a result, businesses that offer this type of payment option can see an increase in sales and revenue.
What Types of Businesses Offer Buy Now Pay Later?
Many businesses now offer buy now pay later services, from small businesses to large corporations. Some common examples include:
- Clothing retailers
- Furniture stores (mattresses are a hot item to finance)
- Electronics stores
- Home improvement stores
- Jewelry stores
If you’re a small business owner, there’s no reason why you shouldn’t offer this type of payment option to your customers. doing so could give you a competitive advantage and help you boost sales.
Reasons Why Customers Use BNPL Services
What do customers like about Buy Now Pay Later? This question is often asked as this type of consumer credit was once a niche form, but during the pandemic there was an exploded demand for it. Even now as we are returning to some sense of normality, enthusiasm for this payment option remains high across all demographics. Let’s explore what it is that makes this option so attractive to consumers.
- To make a purchase without having to pay the full amount upfront.
- To avoid interest charges or other fees associated with traditional credit products.
- To take advantage of sales or promotions offered by retailers.
- To budget for a large purchase over time.
- To consolidate multiple debts into one monthly payment.
- To establish a good credit history.
- To improve cash flow.
- To take advantage of rewards or points programs offered by credit providers.
- To get access to exclusive products or services.
- To improve their financial situation.
- To make a life-changing purchase.
- To take control of their finances.
- To try products out before committing to buying.
How to Offer Buy Now Pay Later Services
There are a few different ways that you can offer buy now pay later services to your customers. The best option is to partner with a BNPL provider, such as one of the following:
Click here for the full list of all Buy Now Pay Later payment options available for small businesses as well as BNPL terminology to learn and more facts about the buy now pay later industry. Most, if not all of them are free for merchants to use.
Small businesses should consider offering buy now pay later services because doing so has many advantages. This type of payment option can help businesses attract new customers, build customer loyalty, and increase sales. In today’s economy, these are all important factors to consider when trying to grow a small business.