Payment options in online stores are undergoing rapid changes. Presently, customers have several choices when it comes to paying for products on the web. At first, debit/credit card payments were the only options. Since then, other payment modes such as cash on delivery and UPI transactions have emerged.
A hassle-free shopping experience motivates customers to purchase more goods. And that’s what new payment options aim at accomplishing. It is a win-win situation for both retailers and shoppers alike. One payment model gaining significant traction in recent times is the buy now, pay later option. It is attractive to the new generations including millennials, Gen X, and Gen Z.
As an online retailer, adopting the buy now, pay later payment option is critical to stay relevant in the current market. It elevates and unlocks brand-new business prospects. In this article, we go over what buy now, pay later is, its advantages, how it works, and how to choose a provider. Let’s get started.
What is buy now pay later?
Buy now, pay later means how it exactly sounds. Using this payment option, customers can purchase goods immediately, and pay at a later time. Usually, shoppers will have to make a downpayment to use this payment mode. A ‘later time’ means customers can choose to split the payment over a few installments – most commonly four.
The convenience of the buy now, pay later enables customers to enjoy products instantly and pay for them gradually over a period of time.
Advantages of buy now pay later
The buy now, pay later phenomenon has become a popular payment option among modern customers. By adopting this model, both you and your customers gain several benefits. Let’s take a look at what they are.
- Frictionless purchase – Customers can purchase over the budget goods by splitting up the payment in multiple installments. Zero-interest fees make it even more convenient.
- Better customer experience – Having the option to purchase goods and pay for them at a later time improves customer satisfaction.
- Attracts customers – Announcing the buy now, pay later model persuades customers to purchase expensive products from your store.
- Boosts loyalty – A good experience with the payment model encourages customers to repeatedly buy products from you. That enhances customer loyalty.
How buy now pay later works
Firstly, you need a buy now, pay later service provider. There are many providers available in the market. After choosing one, you will need to integrate the service with your eCommerce site. Further connecting it with your POS system lets you monitor and log transactions. Then, you can generate reports and optimize business operations according to analytics. Let’s see how the buy now, pay later model works in eCommerce.
- The customer adds products to the cart and navigates to the checkout section
- In the payment options, the customer selects the buy now, pay later option
- The customer makes a downpayment and chooses the number of payment installments
- The customer receives the products and pays for them over the tenure of the installments.
How to choose a suitable service provider that offers the buy now pay later model
- Know what products you want carrying the buy now, pay later payment option. Is it for high-value goods or low to medium value goods?
- Check the terms of the service provider. Look for service providers with minimal to zero interest charges on installments
- Ensure that the service from the provider is easy to integrate into your eCommerce store and your Point of Sale software
In India, the top buy now, pay later service providers are:
- Amazon Pay Later
- Paytm Postpaid
Offering customers a convenient way of purchasing goods enhances sales conversions and profit margins. The buy now, pay later is an effective payment model that modern customers are increasingly using. By integrating it with a cloud-based POS software like SmartPOS, you can efficiently manage, review, and interpret transactions meaningfully. Besides that SmartPOS allows you to manage many other aspects of retail operations. Learn more by contacting us today.