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Millennial buyers have high standards when it comes to the products they want and the means by which they pay for it. While the Indian payment ecosystem offers them a variety of choices there still remains a gap between expectations and supply with respect to a satisfactory payment process.
While many of them like buying products on credit, it would be fair to say that they are not entirely happy with the credit card system because of gaping loopholes relating to transparency, hidden charges, and the greatest concern – high-interest rates.
Buyers in India can be categorised into three broad groups depending upon their payment preferences:
(i) Debit line/ Cash buyers
(ii) Credit line buyers
(iii) Not-so-sure/ buyers abandoning carts
Of the three categories, the last is one that holds plenty of potential for an emerging payment option – BNPL; a payment channel that is transparent, convenient and best of all doesn’t charge interest.
Here are 6 reasons why you must offer BNPL on your e-commerce site:
1. Transparent processing
One of the key features of BNPL is the transparency it provides. Unlike credit cards, customers aren’t left in doubt about any aspect of the transaction. They have clarity about the credit limit, the billing cycle and the penalty for late clearance. This makes the whole buying experience smooth, trustworthy, and delightful for the consumer.
As for merchants, you get a clear picture of what’s owed to you and the date by which you will receive the amount. All ambiguity is removed from the process
2. No or lower interest rates for consumers
Many Buy Now Pay Later options are offered interest-free to all customers. This works to boost consumer trust and loyalty, which then translates into higher purchase frequency and cart conversion.
As for the merchant, the cost of offering BNPL on your platform comes in a lot cheaper than credit cards with the fee structure ranging between 2 per cent to 7 per cent.
3. Added security and advanced speed
Speed and security are two USPs of the BNPL option. BNPL removes the need to share personal financial details making the overall payment experience smoother, faster and secure. A swift payment experience for the user means they spend more money.
4. Near-zero transaction failure
The convenience of BNPL reduces the rate of transaction failure for the consumer. Users encounter near-zero instances of glitches in the payment process which translates to a far superior buying experience.
5. 1-tap smooth payment process
BNPL can play a role in moving some key metrics for merchants including increased conversions, purchase frequency and an increase in basket size. Reports also show how BNPL can play a role in tackling cart abandonments.
6. It’s what Millennials & Gen Z consumers want
BNPL is tapping into the wide pool of millennials and Gen Z consumers that is wary of credit cards but technology savvy and looking for a fast, transparent, hassle-free and safe payment option.
To summarise, Buy Now Pay Later is an evolved payment method that caters to the needs of both businesses and customers. As a business tool, BNPL can help merchants grow their customer base and increase sales with added security, by delivering the three crucial business C’s – Customer, Cost, and Convenience!