The Clearsale Blog

What Merchants Need to Know About BNPL Options

What Merchants Need to Know About BNPL Options

 check list: buy now and pay later

Buy Now Pay Later (BNPL) is continuing to grow throughout Australia among retailers and beyond.

Country Manager (Australia) at ClearSale, Ralph Kooi discusses the different approaches that are available, and how merchants can benefit from BNPL options.

Afterpay announced a partnership with Wix to help SMBs that host their stores on the Wix platform, to add BNPL options.

Competitor Limepay raised $21 million in its second funding round of the year.

 

Then on the other hand, competitor Chase announced its own BNPL program for cardholders in November 2020.

Merchant benefits of BNPL

  • More sales. Mr Kooi says that paying in smaller instalments is more attractive to customers (particularly Millennials and Gen Z customers), rather than dropping the full amount straight away.

In April 2020, PYMNTS reported that 87% of consumers age 22 to 44 are interested in BNPL options.

  • Higher-average order value. Klarna says that its merchants see an average 45% increase in AOV.
  • Greater cross-border reach. Mr Kooi explains, “BNPL that offer cross-border transaction processing capabilities can help merchants sell into more markets. For example, Afterpay now gives partner merchants the option to sell to customers in ANZ, the UK and Canada.

“Cross-border BNPL can also help merchants broaden their international customer based by offering an option that’s already popular in some markets.”

  • Reduced liability for fraud. “BNPL providers that handle payment processing for merchants assume payment fraud risks that would otherwise be the merchants’ responsibility.”

Additionally, customers have to provide more details when signing up to BNPL programs.

 

Which BNPL program is right for you?

Due to its increase in popularity, the options for BNPL services are many!

Mr Kooi provides the factors that merchants should consider when choosing a BNPL service:

  • Processing and service fees. Fees vary from service to service.
  • International reach. If your store wants to expand internationally, then selecting a provider that supports instalment payments on cross-border orders, is important.
  • Fraud liability. “…some but not all BNPL vendors take chargeback risk off the merchant’s plate. The trade-off for this risk reduction is less control over the customer experience during checkout,” says Mr Kooi.
  • Checkout friction and CX. “BNPL that requires too many extra steps may turn away some customers.”
  • Competition and brand loyalty. “Many BNPL vendors have positioned themselves as hopping portals with curated directories of partner stores that they encourage customers to visit. This may divide customers attention and loyalty.”

In his final piece of advice to merchants, Mr Kooi says: “Before selecting a BNPL vendor, merchants need to decide which features and benefits matter most for their business.

“Once a merchant is clear on what they need from BNPL, they can choose a vendor that offers what they’re looking for and gives shoppers what they want.”

Original article published at: https://retailworldmagazine.com.au/what-merchants-need-to-know-about-bnpl-options/

You may also like

Merchant Fraud Journal’s 2021 Trends Report

Merchant Fraud Journal’s 2021 Trends Report

How can merchants anticipate, prevent, and address new fraud tactics in the coming year?

Unify Customer Data for Better Marketing, CX and Fraud Prevention

Unify Customer Data for Better Marketing, CX and Fraud Prevention

Learn how unified data gives you a single view of your customers for your marketing and fraud control teams.

Is your e-commerce store getting the most value from the data you collect? Ideally,..

Consumer Attitudes and Behaviors Are Shaping the Future of Retail

Consumer Attitudes and Behaviors Are Shaping the Future of Retail

To survive the current global economic downturn caused by the coronavirus pandemic, retailers need to fully accept mobile device shopping. To succeed, the e-commerce industry needs to learn about..

What Ecommerce Fraud Issues Will Retailers Face in 2021?

What Ecommerce Fraud Issues Will Retailers Face in 2021?

After a year like no other, merchants and their customers are looking forward to the possibility of some return to normalcy in 2021. However, some of the fraud trends we saw in 2020 will be with..

Ecommerce Platform Profile: Magento

Ecommerce Platform Profile: Magento

So you’re looking for the ecommerce platform that will work for your business, now and into the future? Make sure to include Magento on your list of possibilities. Not only is it one of the most..

Top 7 Ecommerce Trends for 2021 to Watch

Top 7 Ecommerce Trends for 2021 to Watch

While we’re not quite sure what 2021 will bring (it could be normalcy ... or it could be utter chaos), ecommerce is expected to continue its meteoric rise. Shoppers will eventually return to..

Ecommerce Platforms: Top 6 Tips for SEO Strategy Success in 2021

Ecommerce Platforms: Top 6 Tips for SEO Strategy Success in 2021

The success of your ecommerce site hinges on how high it ranks in search results, which will soon become even more challenging with a new Google algorithm update. What this means for ecommerce..

What Can Your Brand Do With Social Video Marketing Now?

What Can Your Brand Do With Social Video Marketing Now?

Both B2C and B2B brands can drive engagement and conversions from social video marketing. Here's how.

How can businesses use social video now? For both B2C and B2B brands, the short answer is..

11 Strategies to Improve Magento 2 Checkout Rates

11 Strategies to Improve Magento 2 Checkout Rates

Magento 2 is robust, flexible, and an all-around leader among ecommerce platforms. However, as with all shopping cart software, it’s up to individual merchants to customize and improve the..

Want to write
for our blog?

Please review our writers' guidelines
https://www2.clear.sale/press/clearsale-guest-blog-guidelines
and then email guestwriter@clear.sale with your pitch!

Subscribe to our blog