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Buy Now Pay Later, commonly known as BNPL, is the new type of digital financing that makes shopping more convenient as it offers a win-win opportunity for both customers and merchants. It allows consumers to shop now and make payments at a later date instead of bearing the brunt of the entire transaction at the point of purchase.
Whether it is high-value purchases like electrical goods and furniture or smaller everyday transactions like groceries and food, consumers can now shop for everything they need with BNPL.
While BNPL providers allow customers to repay their bill at a later date, they also ensure that merchants like you receive the full payment for the product being bought, thereby eliminating your risk of losing any money. But that’s not the online benefit that BNPL brings to your business. Another significant benefit of BNPL is that it can improve your business’ Average Order Value (AOV) and conversions.
How does BNPL Improve Your Average Order Value (AOV) and Cart Size?
Recent trends have shown that customers prefer buying products they want and need online, especially when merchants provide an effortless checkout experience. Implementing BNPL as a payment option helps boost the average amount a customer spends when they make a purchase from your business.
Since BNPL offers customers the opportunity to make a purchase with just one tap, they feel comfortable adding more things to their carts. The seamless transaction experience also ensures that they spend less time pondering over the number of items in their cart and their bill size.
If your website is simple, user-friendly and easy to use yet you’re experiencing a lack of increased conversion, BNPL can help change this scenario. From an e-commerce business’s perspective, a conversion is essentially a product checkout. A BNPL optimized site ensures a smooth experience for the customer as they know that they don’t have to go through the hassle of providing card details, or entering CVVs and OTPs.
Simpl’s 1-tap checkout option, for instance, combined with its interest-free repayment model, can help improve conversions on your website. Another great way for you to increase conversion is to offer a short-term instalment-based payment option that most BNPL providers offer. According to the Buy Now Pay Later tracker by PYMNTS.com, about 87% of consumers between the age of 22 to 44 are interested in monthly instalment plans as against immediate payment.
BNPL solutions are becoming increasingly popular and being incorporated into the checkout pages of many e-commerce sites. This option empowers customers to buy the products they want instantaneously and pay for them later or in various instalments. In turn, merchants have a better opportunity to sell their products. Hence, as a business, it is the right time to make the best of this win-win opportunity by offering additional payment methods to your customers.