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With consumer spending increasing towards the start of the year, and the popularity of online shopping continues to increase across all age categories Merchants are facing both greater possibilities and more competition to win the money of their customers. It is vital to come up with creative ways to meet the needs of consumers and giving them more reasons to visit your website. One of the best places to begin is with the checkout process -- identifying ways to streamline this crucial last step of selling and offer the option of payment to your clients to improve the shopping experience.
One of the trends that has rapidly grown in popularity among online shoppers is the "Buy Now or pay Later" (BNPL) option that is available during check out. BNPL is an alternative payment option that permits buyers to break down the cost of their purchase into affordable installments, which are then distributed across time, sometimes in just a couple of weeks while, in some cases, they are divided over a period of time.
Buy now, pay later is gaining popularity
The increasing amount of people are making use of pay-over-time payments as they are made accessible. In 2023, merchants who operate online witnessed a significant rise in the number of purchases made with BNPL and the number growing by 42.5 percentage from year to year. As a result, BNPL placed around $16.6 billion on its merchant book during the last two months of 2023. This is an increase that Adobe anticipates will continue to grow through 2024.
Around 93.3 million consumers will use BNPL by 2024, according to EMarketer as well as American Banker reported that the BNPL market in the US could grow to up to $8.3 billion by 2028. BNPL is being utilized increasingly by online retail giants like Amazon.com which is further speeding up the growth of the market and making this option more readily available to people that shop online.
That means BNPL is a possibility that merchants should take into consideration when competing on an increasingly crowded online market.
Offering buy now, to pay later: Some things to consider
The addition of BNPL alternatives at the checkout prior to when they are available offers retailers more opportunities to bring in new customers and also create a long-lasting relationships.
If a merchant doesn't provide the BNPL option when they check out, this might be the perfect opportunity to add it into the alternatives. In the case of those who do making it on their websites, either by having the BNPL option prominently displayed on their sites, particularly when you check out or informing customers of the availability of the option through advertising, could help make their brands be noticed and improve the experience of shopping for customers.
The more noticeable the BNPL option is displayed on the site of the retailer, and the earlier they advertise the option via email and through social media and on social networks, the more likely they will want to learn more about it, which will help the seller bring more customers to their website to complete the deal.
BNPL will allow merchants to reach more customers who want to buy now, but want to regulate their cash flow without using credit. With the option of dividing the cost of a purchase by, say, four installments of interest-free payment each two weeks, buyers have the ability to purchase their items without delay. Some BNPL companies, like Affirm provide longer periods of just a few months, or even three years for carts of large sizes or expensive products.
Incorporating a new payment method in the back end of an online store, it may seem daunting to smaller companies who are already working on their own. But, there are options readily available for quick and straightforward setup that can simplify everything for merchants. In particular, retailers are often able to benefit from pre-built ecommerce integrations, such as the AffirmPayments extensions that allows them to include the BNPL option to their existing checkout page.
Benefits of having a buy-now option, pay later on your Woo store
What advantages can the BNPL integration offer? For one, using an integration will make shopping easier in order to cater for the ever-growing number of consumers who prefer to make payments over time. Making sure that customers are on your website when they arrive at the checkout page is crucial, particularly for younger shoppers who are used to online shopping. Actually it is reported by it's reported by National Retail Federation reports that more than 50% (46 percentage) (46 percent) of Gen Z respondents consider a easy checkout procedure to be important to the shopping experience.
The most crucial elements to be considered when it comes to integration is the experience of the purchaser. It's essential that the purchaser has the ability to see their payment options and also go through the process of approval without needing to navigate to a different site. With an integrated payment method, sellers can make sure that the transaction is as easy and simple as it can be for customers, ensuring that there is no obstacle impeding the process to making a purchase.
A smooth checkout experience could assist in reducing abandonment of carts. A previous Baymard Institute metastudy of 49 research reports revealed the rate of abandonment for carts is around 70% and hasn't significantly changed in the past decade. The top reason for abandoning a cart was due to a checkout procedure that was long or difficult (22 percent of the times) and also the site did not offer enough choices for payment (responsible to 13% abandonments). Through the integration of a robust BNPL system, merchants have the ability to address all customer concerns quickly.
What is the best way to decide between a purchase now or pay later payment option?
Picking the BNPL service that is compatible with the needs of your business and with customer requirements is a crucial aspect in determining the best solution. Affirm For instance, Affirm has a range of custom-designed payment solutions for merchants -- these can include the short to the long-term as and the possibility of 0% APR. With the proper payment method which is compatible with customer needs and typical prices, businesses could increase the affordability of consumers and gain customers over the competition.
One of the unique features provided by Affirm is the Adaptive Checkout technology, which gives you the most pertinent ways to pay your customers according to the cost and cart value. Since personalization is the essence of the game on the internet Affirm customizes the duration and APR for each purchase, providing a variety of suitable options to pay over time to the customer and a user-friendly experience.
What could you do to let your clients, current and future, inform them about the BNPL option before payment? Based on the type of market you target, you might want to think about promoting the offer via social media sites. Retail Dive says that 83% of the customers make purchases via social media. Thus, promoting the possibility of providing BNPL through those channels could be an edge. In the event that you're looking to connect with Gen Z be aware that 45 percent of those who have surveyed mentioned TikTok along with Instagram as top apps in influencing their purchase purchases.
Because summer is often an unproductive time for both businesses and businesses, it's a great time for merchants to focus on getting BNPL functional on their websites prior to when it comes to the Back to School rush signals the beginning of the busy period leading up to winter holidays. It gives them the opportunity to think about the vendors they work with, address any technical problems and launch marketing efforts to announce the introduction to BNPL as a new payment method that is available during checkout.
The possibility of having the BNPL option at checkout and promoting it on social media could make an impact for companies looking to get more online spending and outdo other retailers.
Are you ready to incorporate an array of flexible payment options for your online payment process? Apply to Affirm to begin using your Affirm Extensions for Payments in order to allow payment over-time payments via your checkout.
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Payment options offered through Affirm is subject to an eligibility check they might not be accessible in all areas, and they are made available through the following lenders: affirm.com/lenders.
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