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Does Buy Now Pay Later Actually Help Your Customers?
You’ve probably come across a Buy Now, Pay Later (BNPL) offer while online shopping for new clothes, furniture, or house appliances. Pay $12.49 in 4 installments instead of $40.99 upfront.
But B2B businesses can also offer this new, flexible payment method to their customers. BNPL helps your clients by providing flexibility, mobile accessibility, and a better overall experience.
This payment method is popular with B2C businesses and customers because they can immediately increase their shopping cart size for a lower price.
Several businesses have already jumped on this new payment method, and according to a Juniper Research study,
Globally, the B2B payments market is worth $84 trillion.
With the right digital tools, BNPL can be a long-last solution for customers who want or need merchant services.
Let’s get into why BNPL is popular with B2C and B2B customers and how to use this new solution in your business.
Why is Buy Now, Pay Later so Popular with Customers?
B2B products and services are typically higher-priced, so a split payment method attracts customers needing to divide large payments into smaller installments.
There’s consumer demand for BNPL mainly because consumers can buy more products for less upfront. They find that flexible payments make it easier to afford high-dollar products and services.
Unsurprisingly, this demand has made its way from the online shopping page to the professional services sector.
Sometimes customers run into a costly emergency, such as a broken pipe in their basement, and have to consider if the upfront costs are worth it. Traditional financing, such as bank loans, just doesn’t cut it for many customers to make payments from professional services.
According to a Biz2Credit study,
Loan Approval Rates at Banks Increased Slightly in January 2021, but Are Down More Than 50% from January 2020.
So customers struggle to start with a loan to pay off hefty invoices, even with this industry increase in approvals. And going through the borrowing process typically takes a hit on credit scores regardless of approval.
Also consider consumers’ hesitation to make face-to-face interactions with businesses right now, including at lending banks.
Contactless Payments
COVID has affected payment processing with fewer in-person interactions, both in-store and in-office. Customer relationships are also much different from pre-COVID times with more reliance on digital communications and finance solutions.
In response, customers demand (and now prefer) digital, remote solutions for communication and payment processing.
Digital and mobile BNPL solutions like Klarna, Affirm, and Afterpay help capture those customers needing more accessible payment solutions. Customers like BNPL because they can avoid interest if they make payments on time.
B2B businesses need to capture the in-demand payment model of BNPL to better their financial success in an ever-evolving environment.
BNPL can work for your business with the right digital payment solution that makes it easy for your customers to use. And implementing this kind of tool to your business may be easier than you think.
How Does Buy Now, Pay Later Work for My Business?
When businesses require payments from customers in a large sum upfront, it can deter them from making that purchase from the beginning. BNPL helps businesses provide financing to customers to help close a deal as an alternative to traditional methods, like bank lending.
Customers want to be able to get services done with flexible payment plans.
However, they won’t get into your BNPL solution if they don’t know what process they need to undergo — including applications, credit checks, forms, etc.
Struggling to talk to your customers about service fees? Read about how to tackle fee conversations like a pro.
For businesses, a BNPL payment method could change budget models to rely on consistent, smaller payments, rather than larger one-time payments.
And when executed successfully, BNPL for customers can help tremendously with retention and satisfaction.
BNPL for B2B — How It Works
Steps businesses can take to implement BNPL payment processing:
- Find a digital payment processing solution with BNPL.
- Secure a quote deal with customers.
- Gather materials for customers to guide them through the BNPL system.
- Explain how your BNPL solution works.
- Customers submit their financial information and preferred BNPL payment.
- Customer payments are made on a consistent basis until their amount is fully paid off.
A successful BNPL solution should also include split payment plan options, online and/or mobile access, and quick processing.
Get More Payments from Customers with BNPL
Large price points can scare away many customers (and possibly competitors), but splitting that one payment up can help convert them to a sale.
Our payment solution is something customers want, and helps take care of payment processing steps for your business.
BNPL helps customers break their large payments up into smaller ones while getting their item(s) or services upfront. All they need is what they have in their wallet — their existing credit card.
Our BNPL solution can help you offer:
- Touchless payments
- Payment flexibility
- No credit checks (so less impact on credit scores!)
- Easier, faster payment processing
- 24/7 accessibility
All your customers have to do is access your unique payment link, access the payment portal, submit their financial information, and sit back while their credit card is charged monthly.
BNPL for Your Customers and Business
Your customers can benefit from BNPL’s flexibility, accessibility, and overall improved experience.
RBC Capital Markets estimates that point-of-sale loans, similar to BNPL offerings, “ increase retail conversion rates 20% to 30%, and lift the average ticket size between 30% and 50%.”
Other customers and businesses have benefited from this newer payment processing model by making smaller payments over time in exchange for smoother cash flow.
Invest in the right solution — for your customers, and in result, your business.
See this flexible payment solution at work by scheduling a demo with one of our Durango Merchant Service Account Mangers.
