Here are some of the common reasons to adopt one of the deferred payment providers as an added payment option for your customers.
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You could think of this as a free loan.Īs a merchant, there is a lot to like about the Buy Now Pay Later apps and services. Choosing an interest-free payment plan with pay later services and making your payments on time is a nifty way to save costs. This can save you the need to look up your credit card numbers every time you shop online. Either way, you get the option to checkout with your preexisting account created on one of the BNPL apps.
There are two options to using BNPL apps: shopping directly in the apps or shopping on the merchant app or web interface. Convenience – Speed matters these days, and having a seamless payment experience makes shopping all the more enjoyable for consumers.BNPL apps ensure that you don’t have to worry about getting your funds back. In this situation, you may want to return it or ask for a refund. Or it could just be that the product does not satisfy your needs as expected. You could order an item and get the wrong one shipped. Risk-free purchases – let’s face it, online shopping can sometimes be a hit and miss.Additionally, with these apps, you can buy more stuff with the same amount of money. By deferring your payment, you can keep your money longer and hopefully make it work for you. Deferred payments – this is the most significant advantage of using these BNPL apps.Expectedly, the retailers and consumers have different goals, and BNPL apps appeal to each segment differently. We can split the benefits for BNPL service providers into two categories: benefits to consumers and retailers. They attempt to circumvent the shortcomings of credit cards. The retailer receives payment immediately, just as they do if the customer pays using a credit card.Įssentially, the BNPL apps are a credit card solution adapted for 21st-century shoppers. With Buy Now Pay Later services, you receive the item upon checkout. As opposed to using credit cards, shoppers can use BNPL apps to purchase an item but choose to pay for it later.īut this is not like a hire purchase where you get to own the product after making the last installment. It is easy to see the appeal that these BNPL services have in the marketplace. Albeit, this is conditional, as we will cover below. This is because Klarna, similar to most Buy Now Pay Later apps, never charges interest to the shoppers for using the service. You’ll notice that the total amount for split payments, in this case, equals the cost price. However, shoppers using Klarna (one of the largest BNPL service providers) can defer the entire payment or split it into four equal installments of $46.25. The ‘Rosalie Tulle Convertible’ dress in this example costs $185. An example from Revelry, a wedding outfit e-commerce store. Here’s an example from Revelry, a wedding outfit e-commerce store that has integrated Klarna as a payment option. 10 Best Stock Trading Books for Beginnersīuy Now Pay Later (BNPL) Business Model Explained.
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How to Buy Stocks? Complete Beginner’s Guide.15 Top-Rated Investment Books of All Time.What is Investing? Putting Money to Work.The shopper can then pay for items received in multiple installments later. BNPL apps integrate seamlessly with merchant stores allowing the shoppers to carry on their activities easily and settling the bill offsite with the deferred payment provider. They allow the user to shop, often, at no extra cost or a fraction of the cost of using other payment methods such as credit cards. We will also look at the risks of this payment model.įinally, we will consider the 10 of the most popular and secure Buy Now Pay Later apps and service providers in the market for you to consider for your next shopping spree in 2022.īuy Now Pay Later apps are financial tools that make it easier for shoppers to access credit for goods bought. This article will look into why it is becoming increasingly popular by analyzing its benefits to consumers and retailers. It is currently one of the biggest ‘threats’ to the traditional credit card payment model as more and more users shift to the BNPL model. Also called deferred payment or the ‘Shop Now Pay Later’ method, the BNPL model has been around for a little over a decade now. The Buy Now Pay Later (or BNPL) option is one of them. However, in the last few years, the credit card, as a payment option, has seen increasingly more competition for market share from new and innovative payment models. It was a tremendous 20th-century innovation.
Credit cards have been a stable shopping companion for billions of people worldwide for a very long time.
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