Buy Now Pay Later (BNPL) is slated to be one of the fastest-growing payment trends in 2023 - especially among younger consumers. In 2021, 45.9% of Digital Commerce 360's Top 1,000 online retailers offered BNPL, up from 28.2% in 2020.
BNPL is a payment option that allows customers to pay over time, usually in multiple installments. Unlike traditional credit, BNPL doesn't require a credit check and can be used on and offline with a digital wallet. Because of its flexible structure, BNPL allows users to purchase things they might not otherwise be able to afford.
With potentially tough economic times on the horizon, merchants who offer BNPL have the opportunity to differentiate themselves while providing financial relief to buyers.
Several industries have already adopted BNPL payment structures, including:
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Retail
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Medical
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Entertainment
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Fashion
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Housing/Rental
McKinsey found that Buy Now Pay Later is especially popular in sectors with high margins and customer acquisition costs since delayed payments make it easier for consumers to justify their spending. "Merchants are seeing value in these solutions, as most enhance cart conversion, increase average order value, and attract new, younger customers to the merchants' platforms."
For instance, in the rental market, many property managers have partnered with BNPL providers such as Flex and Circa to allow renters to pay on their own schedule rather than on the first of the month. With this, fewer tenants default on their rent, and property managers don't have to spend as much time chasing down missed payments.
Introducing BNPL into your merchant payment services enables you to meet customer expectations, improve convenience and streamline the checkout process. You will also win more sales from customers who might not have afforded their purchase without the flexibility of BNPL.
To demystify the Buy Now Pay Later movement, our CMO Peter Galvin spoke with Gretchen Salois from Digital Commerce 360 about the trend and what it means for the payments industry.
To learn more, read the full article here.
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