If there is one thing better than allowing your customers to buy now and pay later, it’s allowing them to do it in a way that’s effortless
The mass take-up of Buy Now Pay Later (BNPL) has been one of the big retail stories of recent times. Over the last five years, millions of consumers, especially younger ones, have embraced taking out interest-free loans to pay for goods or services in instalments. While adding any BNPL option will help a business boost sales, not all BNPLs are created equal.
The standard arrangements
Compared to applying for a credit card or personal loan, applying to use a BNPL service is reasonably quick and easy, especially for younger people without much of a credit history.
That noted, it still involves some effort. Typically, would-be BNPL users need to go to the BNPL’s website and set up an account BEFORE they can purchase anything. (And if they don’t need to do it before they start shopping, they certainly need to do it soon afterwards.) While this process is not overly onerous, it usually involves setting up an account, uploading proof of identity then choosing a password (which may need to be entered whenever purchases are made).
How checkout friction is costing you sales
Imagine an ecommerce business that sells smartphones or wedding dresses or sofas. No doubt a proportion of site visitors who think they are merely window shopping or comparison pricing will become unexpectedly enchanted with a particular iPhone or bridal gown or chaise longue and want to BUY IT RIGHT NOW.
If the ecommerce business only offers the standard BNPL providers, there will be a couple of hurdles to jump over if the sale is to be closed.
First, the besotted, would-be purchaser will need to create an account with the BNPL provider. Second, the aspiring buyer will need to be confident they can adhere to an inflexible payment plan. For example, a soon-to-be bride will need to calculate whether she’s in a position to rustle up $2,500 every two weeks to pay off the $10,000 wedding dress she’s just fallen in love with.
Limepay – native, seamless, on-site BNPL
For businesses that use BNPL provider Limepay, these sale-obstructing hurdles melt away. First, the customer doesn’t need to do anything – aside from move a toggle switch to indicate they want to pay in instalments in order to access a BNPL service from Limepay. As soon as they signal they want to pay in instalments, they go through a simple two-factor authentication right there on the merchant’s site, and away they go. No bouncing out to third-parties, and no signing up for a special account.
From there, all the follow-up SMS and email communication comes from the merchant directly to their customer, with Limepay only getting involved when the payment falls overdue (as they ultimately wear the credit risk). The data from Limepay suggests this frictionless approach increases basket sizes and reduces cart-abandonment significantly - ultimately dramatically increasing revenues for the merchant, as well as repeat customer purchase rates.
Consumers, especially digitally native ones, now have zero patience for friction – even if that friction seems relatively insubstantial. If you’re interested in learning more about how you can spare your customers the hassle of going through a BNPL application process only to then have to adhere to a rigid repayment schedule, this 60-second video explains how Limepay makes buying now and paying later easy here. If you then want to look into implementing a customer-delighting BNPL in your business, you can arrange a demo here here.