Customers and companies alike are faced with a dilemma in the new age of buying. Nobody is quite sure when the sales funds should be given over to retailers. Traditional retail transactions entail customers handing over money (in one type or another) as fast as they make a transaction; but now, some businesses are providing “buy now, pay later” solutions to enable consumers to postpone giving up their hard-earned cash.
Buying now, paying later (or BNPL) requires special credit lines supposed to make it easier for customers to purchase goods and services. These credit lines tend to be low-or non-interest lines and are designed to act as a gradual payback system.
But how does allowing this type of payment have an effect on the way a company does business? Would it do more damage than good, or is it a huge advantage that cannot be overlooked? Here, we’re going to discuss some of the pros and cons of buying now, paying later schemes for small companies.
The Advantages and Disadvantage of “BNPL”
They Make Consumers Out of Browsers
The browser is familiar to any business owner. They spend an extended amount of energy in your store, pick up a few items just to keep them down, and seem to read the labels and price tags endlessly. It can be annoying to watch a future sale float from location to location until it finally disappears.
If you integrate a purchase now, pay later scheme like lay buy with your payment choices, browsers will be much easier to convert to a paying customer. Even one fashion retailer announced a 20% rise in revenue following the implementation of BNPL services. In a competitive retail market, BNPL can be just the boost you need to get ahead of you.
Improvements for The Customer Lifecycle
The timeline of the customer includes everything from when the buyer first learns about your product to when they buy a product. There are numerous variables that play a part in this lifecycle—marketing, conversion, retention, and more are all important parts of the equation.
Giving BNPL options to customers helps you to set your company apart and stand as a more personalized and welcoming shopping experience. Clients appreciate to be catered for—-Why are they denied the chance?
Greater Merchant Fees
Unfortunately, buying now, paying later model comes with drawbacks. One of the most remarkable and peculiar of these is that the mechanism usually ensures that you charge higher commercial fees than you do by conventional payment methods.
Credit companies offering BNPL services earn extra cash on the customer side of the deal. They have charges in place to make some profit in this field, but they still rely on transaction fees to keep the business going. Usually, these rates are higher than those charged by other credit providers.
It is rarely easy to integrate new technology and work place processes into your day-to-day business dealings-bringing BNPL services into your sales portfolio is no exception. Implementing these financing options usually calls for special customization tools. Not only does this entail extra effort and thought at your end, but it also means handing over a hefty sum of cash.
Any of these problems can be subverted by choosing a third-party BNPL provider and “locking in” with them. This means that you get the help you need for effective implementation and that you can snag loyalty deals down the line.