16/05/2024
Written by Paylands Position Dpto Comunicación
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In today’s eCommerce landscape, payment methods continue to evolve to meet the new needs and expectations of consumers. A few years ago, a payment option emerged that caught the attention of both users and retailers: “Buy Now, Pay Later” (BNPL). A new alternative designed to respond to consumer demand and economic factors affecting their budgets. Below, we explain what this tool is, how it works, and what you need to know — both as a customer and as a retailer.
“Buy Now, Pay Later”, also known as BNPL, is a payment method that allows shoppers to split or defer the cost of their purchases. Instead of paying at the moment of purchase, customers can postpone the payment until a later date — often after receiving the product or service.
This method is commonly used for purchases of moderate amounts, such as fashion, sports equipment or household appliances. It is a convenient alternative when you need to access a product immediately but cannot cover the total cost upfront.
For example, if an essential appliance like your fridge breaks down and you don’t have the funds to replace it right away, “Buy Now, Pay Later” enables you to buy a new one and pay in comfortable instalments, with full flexibility.
At the checkout stage, the customer can choose whether to pay immediately or defer the cost through an automatically granted credit, which must then be repaid in affordable monthly instalments. These credits may sometimes include fees or interest, although that is not always the case. Therefore, it is important for customers to carefully review the terms and conditions of BNPL providers before using them.
The way this payment method works is simple and convenient — for both businesses and customers.
Merchants that wish to integrate BNPL must contract the services of an online payment gateway that offers this feature, such as PaynoPain. Once integrated, when a customer makes a purchase with this method, the retailer receives the full payment upfront from the BNPL provider.
At checkout, the customer selects “Buy Now, Pay Later” from the available payment options. Then they choose the instalment plan that best suits their needs (depending on what the provider offers) and undergo a quick credit check for approval. It is that fast and straightforward.
Anyone who meets the requirements set by the BNPL provider can use this payment method. These requirements vary depending on the provider and may include factors such as the purchase amount, the customer’s credit history, and other financial considerations. Smaller purchases are typically easier to finance, while higher-value transactions may require stricter conditions.
Customers can acquire products or services immediately without having to pay the full cost upfront. This is particularly useful when faced with unexpected expenses or when a major purchase is required.
Some providers offer BNPL without interest, provided the customer meets the agreed repayment period. This is a key advantage for those who want to avoid extra financial charges.
Consumers can access more expensive products or services as the cost can be spread over time, making it easier to manage financially.
Financing approval is quick and straightforward, unlike the lengthy process of applying for traditional credit. Approval usually takes less than a minute, removing much of the bureaucracy that can be a barrier to purchase.
By eliminating financial barriers, BNPL makes it easier for customers to complete their purchases. This translates into increased sales and a smoother buying journey for consumers.
Offering a more convincing shopping experience doesn’t just boost sales; it also enhances long-term customer loyalty. Securing repeat customers is a major advantage for any retailer.
Cart abandonment is one of the most common challenges in eCommerce. By offering flexible payment options such as BNPL, abandonment rates can be reduced. When customers see they can spread the cost, they are less likely to abandon their cart and more likely to complete the purchase.
More expensive products become more accessible when immediate payment is not required. Deferred payments encourage customers to feel more comfortable purchasing higher-value items.
Consumers must familiarise themselves with the provider’s terms and conditions, including interest rates and repayment deadlines. They should also assess whether using BNPL fits within their personal financial situation.
Retailers, on the other hand, should consider how BNPL fits into their existing payment strategy. This means choosing reliable providers, establishing clear policies for payment and returns, and ensuring the provider operates in their target market. It is also important to check credit limits set by the BNPL provider in each region.
At PaynoPain, as a payment solutions provider, we help you make payments easier for your customers with a wide range of payment methods. Increasingly, retailers are opting to integrate our virtual POS to improve conversion rates and offer a fast, secure payment experience. If you would like to know more about “Buy Now, Pay Later”, feel free to get in touch with us.
Paylands
Paylands es una pasarela de pagos integral y omnicanal que ofrece a nuestros clientes una interfaz adaptable, segura y rápida. Nuestro objetivo es garantizar una experiencia de usuario ágil e intuitiva, para que el proceso de pago sea sencillo y rápido desde cualquier dispositivo.
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