How to Choose a ‘Buy Now, Pay Later’ Solution
As an online merchant, you are always looking for ways to improve your business and meet your shoppers’ ever-evolving needs. That’s just part of the game, right! However, sometimes that’s hard to do when changes are occurring at such a fast pace. Especially tech-wise!
One big trend that looks like it is here to stay, and is essential to provide to your customers in today’s day, is a ‘buy now, pay later’ (BNPL) option. One BNPL option is installment payments which allows the total cost of a product to be broken into monthly payments. This allows shoppers to buy better quality products or items that might have otherwise been out of reach. There is also the deferred payment option that allows shoppers to get their hands on the product without having to pay anything. They can test the merchandise, like they would in a store, and then decide if they are going to keep it (and pay) or return it. If a BNPL option is available to them, they are more likely to make a purchase.
So, let’s say you are ready and willing to jump onboard and offer this solution. The key question now is how to choose the best provider? What do you need to look for? Is there data to show that this is the right direction to go in (gotta love good data right!)? And, what are the key factors that a solution should provide?
4 Key Questions
No sweat! We are here to help you break down your decision process. These are the four key concepts to consider when selecting a provider:
- How to give shoppers what they want?
- How to help shoppers build bigger carts?
- Will it keep checkout simple?
- Are interest-free options offered?
Giving shoppers what they want
In addition to “paying later”, consumers love the ability to break larger-ticket purchases into multiple payments (aka installment payments), which has seen significant market growth. In 2017, they represented US$1.2T in volume, and have been growing 15% year over year. 35% of shoppers say they are more likely to make a purchase if they can pay in monthly installments. Therefore, it is important that the provider you choose offers both installment payment and deferred payment options.
Building bigger shopping carts
Interested in increasing your average order value (AOV)? Of course you are! Did you know that 67% of shoppers are more likely to make bigger purchases if they could pay in installments? That is a really big slice of pie! Of those who are already shopping, 25% said they would be likely to add items or upgrade to more expensive items if this option was available. Once again, combining ‘pay later’ options with installment payment options is key!
Keeping checkout simple
The first two points solidified the need for installment payment options. Now, for the actual embedding of a provider’s technology onto your site. All online retailers understand and shudder at the word ‘friction’. You know what kind of friction I’m talking about…when your website takes a moment too long to load or there are too many questions that irritate and cause you to lose a customer. 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 is important to reiterate the need for implementing a solution that is simple for the end user. It’s process needs to be short and sweet and embed seamlessly into your checkout process.
Putting a cherry on top
Incorporating the right ‘buy now, pay later’ solution in your online store means finding a provider that has seamless technology and offers simple solutions that meet your customers needs and expectations. How can you tell which one is the better option, though? Who offers the most to you and your shoppers? Let’s go back to the numbers. Shoppers don’t like surprises. They don’t like fees or interest. And they don’t like fine print. 47% of shoppers say having zero interest is the most important thing they consider when choosing an installment plan. So, start there. Look for providers who offer 0% interest.
Splitit understood all of your shoppers’ pain points, which is why they developed a solution that runs solely on a shoppers credit (or debit) card, does not require application forms or credit checks, and offers instant approval with zero percent interest and no fees. It puts the “cherry on top” to make it a deal your shoppers can’t turn down.
Read more about the installment payment industry and see a side-by-side comparison of providers here.