Digital upskilling

If you’ve bought something online recently, there’s a fair chance the site you were on would have offered you the option to purchase items via a buy-now-pay-later (BNPL) provider. The convenience, easy approval and interest-free terms associated with BNPL platforms are attractive to many. More than five million Australians have signed up for at least one BNPL platform.

Offering a BNPL service allows your business to access the growing cohort of consumers who rely on these providers to complete purchases they might not have made otherwise. BNPL providers are fully integrated within an online store’s checkout, which makes the transaction process easy.

Purchasing through a BNPL provider is almost automatic. There’s no need to go to your wallet for your credit card to fill out the details. Customers who use BNPL services receive their items instantly and they make instalment repayments to the BNPL service provider, not the store that the goods are purchased from.

BNPL for small businesses is another way to allow your customers to pay.

• The customer purchasing from you is required to pass a credit check.
• Then, the BNPL provider pays you the full amount.
• The customer is required to pay the third-party service provider back over time in a series of instalments.
• The credit check is not in-depth and does not affect the purchaser’s credit score.

Companies take a cut of profits that average from 2-8% of the purchase value. You might be wondering why you should consider offering BNPL to your customers. In fact, there are various benefits, and it offers an important way for small businesses to improve growth.

• Drive sales: Consumers can feel more comfortable making bigger purchases.
• Remain competitive: With so many other companies offering this service, customers may prefer to shop elsewhere if you don’t do the same.
• Improve trust and consumer relationships: Customers are much more likely to return to businesses that offer BNPL options.
• Increase average order value: Customers are more likely to make bigger purchases when offered the opportunity to pay it off.

BNPL’s appeal is greatest among millennials, 70% of whom said they are highly interested in using instalment plans at luxury and specialty retailers. The data shows that 26% of millennials paid for their most recent online purchase with BNPL, and 15% did so in stores.

Overall, different BNPL has pros and cons that are suited to your business and customer base, take the time to pick the one that works best for you.

Check out our short video to learn more about BNPL providers.