In the realm of e-commerce, the “Buy Now Pay Later” (BNPL) payment model is gaining momentum, revolutionizing the way customers approach payments. BNPL allows shoppers to spread the cost of their purchases over a fixed period, making it an enticing option for those seeking financial flexibility.
The process begins with an initial payment, typically a small percentage of the total purchase, granting customers immediate access to the desired product or service. The remaining balance is then settled through installments, encouraging higher-value purchases without the worry of steep interest fees.
As consumers increasingly favor agile payment solutions, the global adoption of BNPL is projected to reach 12% of e-commerce spending on consumer goods by 2025, amounting to an estimated $680 billion worldwide (Kaleido Intelligence).
This article delves into the benefits of BNPL, exploring its pros and cons to help PrestaShop store owners make informed decisions.
How Does Buy Now, Pay Later Work on PrestaShop?
As an e-commerce merchant, you can choose from multiple extensions and integrate them into your PrestaShop store to offer BNPL to customers. The extensions work with a payment gateway, e.g., Stripe, and allow customers to pay via installments instead of a single payment through their credit cards.
You can choose from various PrestaShop extensions to automate BNPL on your store, like the Prestashop Invoice Payment Option by Addify.
The module offers an Invoice Payment Method at checkout and lets store owners set rule-based management to enable customers to buy now, pay later. It facilitates B2B customers to receive invoices before making digital payments and also offers automatic email reminders.
With the extension, store owners can display invoice payment options and a list of total paid and unpaid orders, streamlining BNPL payments.
Get Prestashop Buy Now Pay Later Module from Prestashop Addons
Get it from Addify Store
Benefits of Buy Now Pay Later for Store Owners
Here are the benefits of the BNPL Prestashop Payment Method over other methods:
- Boost Sales
- Gain Competitive Edge
- Build Trust
- Decrease Cart Abandonment
- Encourage High-Value Purchases
- Go Global
Now, we will explore each of the above benefits, one by one.
Boost Sales
Embracing BNPL provides an increased ability for customers to make purchases by spreading out payments. This, in turn, positively impacts every sale and significantly increases the likelihood of higher average transactions.
Oftentimes, potential customers are ready to make a purchase mentally and emotionally, but financial constraints hinder them. Accepting BNPL payments increases website visitor conversions to paying customers. BNPL options allow customers to extend payments over their chosen period, contributing to higher purchases.
Gain Competitive Edge
Stores accepting BNPL solutions gain a competitive advantage in the market. As the adoption of BNPL rises, these stores are well-positioned to respond to customer needs, attracting a diverse clientele.
As BNPL becomes a popular shopping trend, integrating it into online stores is not just a trend-following move but a strategic response to consumer preferences, leading to sustained business growth.
Build Trust
BNPL allows customers to try products before paying, fostering trust in online shops. The flexible nature of BNPL, where customers can return products without payment if dissatisfied, results in increased trust and improved loyalty to trusted brands. Enhanced customer retention rates are also achieved through trust and brand loyalty.
Decrease Cart Abandonment
Providing BNPL options addresses the issue of cart abandonment due to a lack of payment options or lack of funds. When customers have more options to make purchases and are allowed to pay less upfront, they are less likely to abandon their carts.
Encourage High-Value Purchases
BNPL encourages customers to make high-value purchases by spreading the cost over time. Merchants implementing BNPL services often report a significant increase in average checkout value and conversions.
When customers are allowed to pay through installments, they can make expensive purchases, which otherwise are not feasible for them.
Go Global
As indicated by market research, the global BNPL market is expected to expand significantly. Integrating BNPL positions businesses to tap into this growing market, fostering global expansion and increased transaction volume.
Benefits of Buy Now Pay Later for Customers
Consumers increasingly utilize BNPL as a key element of their intelligent budgeting strategy. This financial tool empowers individuals to manage their expenses effectively while enjoying the products they desire.
Payments through BNPL are intelligently divided into shorter periods, corresponding to smaller amounts. This division reduces financial pressure on consumers, making it easier for them to manage their cash flow effectively.
It enables shoppers to make immediate purchases, even if they currently lack the financial capacity to pay the full amount upfront. This feature enhances the shopping experience by providing flexibility in payments.
Possible Disadvantages of BNPL to Keep in Mind
Buy Now Pay Later (BNPL) services, while advantageous, come with certain drawbacks that merchants should be mindful of. Consumer debt and potential payment defaults may negatively impact a company’s net income and brand reputation. Therefore, a thoughtful and strategic implementation of BNPL is crucial for ensuring both customer welfare and sustainable business growth.
Conclusion
Buy Now Pay Later offers a multitude of benefits for both customers and store owners. The flexibility, convenience, and strategic advantages of BNPL make it a pivotal element in contemporary e-commerce, contributing to increased sales, enhanced customer experiences, and sustained business growth.
As the world continuously moves towards better and faster payment options, it is time you also incorporate appropriate payment strategies to boost sales in your store.
