Buy now pay later scheme is not something new and not only used by Ecommerce or large businesses anymore. Even small business and retail store owners are also providing a buy now pay later option to their customers. To understand how it works first we need to know what BNPL is. The buy now pays later option allows a customer to buy a product and pay for it later in installments. You don’t need to pay the full amount up-front at the time of purchasing a product. Some BNPL providers may charge you some fee at first for the product rest you can pay in installments.
Many people like to use the BNPL option when they can’t afford a product or have enough credits. Buy now pay later bigcommerce merchants will have an interest-free payment option. But the question is how do merchants take the benefit from the BNPL scheme. As customers are not paying for the product up-front.
How Does BNPL Work for Merchants?
Merchants don’t have to wait till the customer pays the full amount for the product. Merchants get paid the entire amount from the BNPL provider at the time when a customer is buying using the BNPL option. The customer has to repay the BNPL provider in installments. In simple terms, merchants don’t get engaged with the repayment that customers have to do. BNPL provider directly deals with the customer for the repayment for their installment.
Merchants get access to the web portal or app where they can track the status of the BNPL sales. If a customer is paying late they will be charged with an interest rate or penalty fee in some cases if the customer fails to pay they will be banned from using the BNPL service in the future. Also, the merchant transaction fee is higher than the customer payment.
Advantages Of BNPL for Merchants
By providing BNPL you are building trust with your customers. Not only will customers trust your business but will also come back to you in the future. Even merchants receive their full payment upfront while it’s the BNPL provider and the customer who makes the deal and pays in installment. You don’t have to worry about any loss or risk.
So, for merchants, BNPL is of no risk and losing money as the customer will directly deal with the BNPL provider and you get your full payment. it will also boost your sales and conversion fee. Customers who can’t afford expensive products will benefit from the buy now and pay later scheme. Greater clients will get attracted to your business.
Types of BNPL Services
There are mainly two types of BNPL schemes: Online store and point of sale system.
Online Store- You can put the BNPL payment option on your online store. Whenever a customer wants to pay using the buy now and pay later option they can simply pick the BNPL option. Customers have to register for BNPL to see if they are eligible for the scheme. Once they are eligible they can make their payments using BNPL.
In-Store- Even retail stores provide a BNPL option but it is called point-of-sale financing. Merchants can set up point-of-sale financing to their customers in offline stores by registering. Customers can choose the BNPL option at the checkout option. They will receive a payment link or QR code where they can make the payment using the BNPL scheme.
Should You Provide the BNPL Option?
If you want to attract your customers, want to grow your business, provide your customers with a new payment option then buy now and pay later can be the option for you. All you need to do is just find a BNPL service provider. There are some big companies like Klarna, Clearpay, LayBuy, and more that can provide you the BNPL service for your business. You just need to apply and register yourself as a BNPL merchant and an online or offline store.
Different BNPL providers will charge your different fees and contract. You will know about all their schemes once you apply and register yourself with the provider. Buy now pay later big commerce added new partners for the BNPL option.
Conclusion
As you can see, BNPL options are great for both merchants and customers. Merchants don’t have to worry about their money as they will get paid from their BNPL provider when a customer is buying using the BNPL scheme. Customers who can’t afford expensive products can now buy the product without paying the entire amount upfront. You can start providing BNPL service easily by just registering yourself with a BNPL provider.
