Buy now pay later is a payment method that is growing in popularity nowadays. Instead of the typical process of the customer paying right away after they buy something online, the latter will let them pay the cost in installments for a certain period, typically for a few weeks. You can also adapt it in your online business, but before you do, learn about its pros and cons first to determine if it’s an excellent option for you.
Buy now pay later pros
- Better customer experience. Clients are happier and more satisfied when they have more options to choose from, including their payment methods. With this additional payment option, your business will remain competitive. Other companies in the same industry may be offering this method now. If you have not adopted this trend yet, you could be behind the competition. Your customers may move to them if they find that they offer this payment method and you don’t.
- Support more customers. Since the repayment of credit is installment, more clients will be able to afford it. Some customers may want to purchase your products but may not have the money to pay for them at the time of purchase. Buy now pay later spreads the cost into smaller payments within a certain period, making it easier for customers to pay. If you decide to use this payment method, promote it so existing, and potential clients would know about it. You can use auto dialer software if you have several leads to contact. Besides promoting this method, you can also use the software for your other marketing and sales campaigns and general customer service.
- Improve conversion rates. Often, customers add items on their carts when shopping online and end up not checking out. It could be that they want to buy them, but they do not have the funds to pay for the total amount. With the buy now pay later in hand, there is a better chance they will finally get to complete the purchase since they don’t have to pay from their pockets right away.
- Increase sales. This benefit is related to the previous item. More clients checking their orders out will ultimately increase your sales, thus making your company grow. It’s the goal of every business to continue generating and increasing its revenue.
Buy now pay later cons
- Higher fees. Buy now pay later providers, such as banks and third-party financing service providers, give higher interest rates over the use of credit cards or other finance options. They usually add the fees to both the merchant and customer.
- It encourages customers to get debts. Clients will be enticed to use it, which is a form of credit. However, it may not be beneficial to those struggling financially as it may add to their hardship and those who have trouble managing their finances.
- Issues with integration. You need to make changes to your site to offer this payment method. If you are not a pro at this, you need to hire a professional to do the job, which is an added cost.
Weigh the pros and cons of using the buy now pay later method, and see if it’s something that you can incorporate into your business.
