As an online merchant, you’re always looking for ways to improve your business and meet your customers’ ever-evolving needs. Sometimes that’s easier said than done – especially in this fast-paced digital world. But with the right buy now, pay later solution on your site, keeping your customers happy is just, well, easy.
However, it’s not just about plugging in a Pay-in-4 button and calling it a day. As buy now, pay later becomes more popular, retailers need to be smart about how they integrate these solutions to fit their brand while meeting consumer demands. There’s a fine line between giving your audience a great experience and cluttering up your checkout beyond recognition.
Here, we’ve got the total breakdown on how buy now, pay later can benefit you, with tips on how to choose a platform that meets the needs of your customers and your business.
How buy now, pay later works: A quick breakdown
There are a few different ways that buy now, pay later is being used across the e-commerce space. When considering which is the best fit for your business, think about your target audience and which payment options will appeal to them the most.
Existing card-based platform
This is the installments-as-a-service solution that Splitit provides. Customers leverage their existing credit card as payment for their buy now, pay later payment plan. There’s no need to undergo a credit check,take out an additional line of credit or fill in any applications – everything they need is right in their wallet.
Payments will automatically be deducted in installments and charged to their credit card, without any additional fees or interest (besides pre-existing fees or interest already associated with their card).
Splitit also offers a white-label service, which means it can be seamlessly integrated into your own brand and user journey. This helps to avoid confusion at the checkout and prevents customers from needing to navigate to a third-party payment window or getting bogged down by branded payment considerations.
As well as providing a smooth customer experience, Splitit helps to build your brand authority and customer trust at the final stage of the purchasing flow.
Credit-based platforms
Credit-based buy now, pay later solutions require customers to undergo a credit check and, if approved, take out a new line of credit. From here, they’ll link their credit or debit card and make an initial payment, followed by automatic or manual installations.
Some credit-based providers will also charge interest or additional fees, alongside the cost of the item.
For a detailed breakdown on card and credit-based buy now, pay later solutions, check out our Merchant’s Guide.
Deferred payments
Deferred buy now, pay later is a payment option that allows customers to get their hands on the product without having to pay anything upfront.
They can order their items online, test the merchandise, and then decide if they are going to keep it (and pay) or return it.
Choosing a buy now, pay later platform
With the range of buy now, pay later solutions available, it can feel overwhelming when you’re trying to decide which is the best fit for your business. Here, we’ve broken down the key concepts to consider when choosing a buy now, pay later platform:
- Does it give customers what they want?
- Does it support your brand, KPIs and growth goals?
- Does it reduce friction at the checkout and enhance your customer experience?
1. Giving customers what they want
Buy now, pay later platforms give customers more flexibility and control over their purchases. It’s a solution that allows them to break larger-ticket purchases into smaller installments and pay at a pace that fits their budget.
The numbers speak for themselves: 35% of customers say they are more likely to make a purchase if they can pay in monthly installments and 47% of customers say having zero interest is the most important thing they consider when choosing an installment plan.
Splitit ticks both of these boxes. By using their existing credit card, customers are able to pay for their purchase in smaller installments and avoid having a large balance sitting on their account (which helps to mitigate interest buildup over time). Plus, they can still collect their credit card points and rewards.
From a retailer perspective, buy now, pay later has seen significant market growth, which clearly spells out the consumer demand for this type of payment option: in 2020, these platforms represented $97 billion (USD) of all global e-commerce transactions. Comparatively, credit cards have a transaction volume of $3.7 trillion (USD).
Splitit provides the best of both worlds – our installments-as-a-service platform means customers can leverage the untapped power of their credit cards within a flexible, BNPL format.
2. Supporting business KPIs and growth
When choosing a buy now, pay later platform, consider how it can support your growth across your key KPIs, such as new customer acquisition, AOV, and conversion. Look for a platform that aligns with your strategy in a way that supports your product and customer profile.
New customer acquisition
67% of customers say they’re more likely to make bigger purchases (such as electronics and furniture) if they can pay in installments.
With Splitit, there are no customer acquisition costs or barriers, as millions of credit card users around the world are already equipped with the tools they need to leverage our installments-as-a-service solution.
And it’s exactly what they’re looking for – when asked about the type of buy now, pay later platform they’re looking for, 60% of consumers say they prefer a solution that works with their current credit card.
Average order value
Of those who are already shopping, 25% said they would be likely to add items or upgrade to more expensive items if they had the option to pay through interest-free monthly payments.
Many BNPL providers have a set purchase limit and will run a soft credit check to decide how much a customer is eligible to borrow. Splitit’s purchase limit can be as high as the merchant wants it to be and approval is based on the available space on the customer’s credit card.
Splitit’s $1,000+ AOV is four times higher than other buy now, pay later providers, which reflects the way a card-based white-label platform can attract high-value shoppers to an e-commerce site.
Conversion
Integrating buy now, pay later into your site can support your goals for increasing sales – Splitit has tracked retailer conversion rate improvement at an average of 30%.
This takes shape in many ways, depending on the product and customer journey – mattress retailer Emma saw a 75% lift in conversions after partnering with Splitit.
3. Reducing friction at checkout and enhancing customer experience
We’ve gone through all the important reasons that e-commerce retailers need installment payment options – but how does this actually look on your site?
All online retailers understand (and shudder) at the word ‘friction’. You know what kind of friction we’re talking about: site speed, confusing content, broken customer experience etc. These are all things that the right buy now, pay later platform can help you avoid (and maybe even improve).
A whopping 87% of abandoned carts are due to a checkout process being too long or complicated. So, while it may seem rather obvious, it’s important to reiterate the need for a white-label platform that makes things as simple as possible for the end user.
Splitit’s installments-as-a-service process is short, simple, and seamlessly embedded into your existing checkout flow. From a customer point of view, there’s no need to fill out any applications or provide a social security number. It’s a simple choice between paying upfront or selecting the monthly payment plan that best suits them, followed by entering their card details.
For retailers, that means there’s no need for customers to navigate to a third-party platform and to input all their personal data. Splitit has the fastest and most integrated payment experience out of any buy now, pay later platform. It’s designed to scale globally and support Shopify, SFCC, Wix, Magento, BigCommerce, and WooCommerce, with the option for custom integration.
Because Splitit offers a white-label platform, you can take ownership of these benefits and build affinity with your customers by branding the experience as your own. Unlike many large BNPL platforms, we don’t collect customer data, which means there’s no risk of breaking customer trust or losing your audience through remarketing.
This seamless experience supports conversion and retention while also building customers’ trust for your brand.
So – how do you choose the best buy now, pay later platform?
Incorporating the right buy now, pay later solution in your online store is all about finding a provider that has seamless technology and offers simple solutions that meet your customers’ needs and expectations.
Splitit is designed to alleviate all of your customers’ pain points. We’ve developed an installments-as-a-service solution that runs solely on a customer’s credit card, doesn’t require application forms or credit checks, and offers instant approval with no added interest and no fees.
For customers, that means more freedom to make purchases and better control over their finances. For retailers, that means higher AOV, improved conversion, and easy integration that enhances your existing user experience.
Learn more about Splitit for e-commerce and how you can get started today for free.