Buy Now Pay Later: Ensuring choice and flexibility in payments

Understanding buy now pay later (BNPL)

Selecting a payment method is a critical part of the customer journey. Any friction in the payment process or lack of options at checkout can lead to lost sales. Flexibility in payments is crucial for reducing cart abandonment rates, which remains one of the biggest challenges for online merchants, with 81% of shoppers abandoning their carts before completing their purchase. Providing alternative payment methods and flexible credit options can significantly reduce this rate and enhance the user experience.

Point of Sale Financing (POS Financing) or “Buy Now Pay Later” (BNPL) is an innovative alternative payment method offered alongside traditional options. It allows consumers to receive financing options instantly at the point of purchase, alleviating the need to rack up credit card bills. BNPL offers consumers accommodating terms, controlled payments, a set payoff date, and often 0% APR, compared to traditional credit cards that can carry an average APR of 17%.

The rise of installment buy now pay later solutions

Installment Buy Now Pay Later financing has surged, becoming a standard payment option among shoppers of all ages. Merchants utilizing BNPL solutions can see an increase in sales by up to 35%, as consumers are drawn to short-term installment plans that help them manage cash flow and budgets more effectively.

ChargeAfter, for instance, offers a “Multi-lender” waterfall platform that delivers personalized financing options from more than ten lenders at checkout. This network specializes in point-of-sale financing across various credit types, approving 80-85% of applications in under two seconds. In today’s economic environment, offering a robust POS financing platform that serves consumers across every credit spectrum is essential.

Flexibility in payments: A competitive advantage

Merchants not offering a multi-lender waterfall financing platform could lose up to 60-70% of their potential sales. ChargeAfter’s eCommerce waterfall is designed to achieve maximum results. Applications are first checked against prime lenders, who cater to borrowers with excellent credit. If declined, the application moves to near-prime lenders and finally to subprime lenders, ensuring multiple rates and terms are available to shoppers. This system allows consumers to select the most personalized offer at checkout.

ChargeAfter merchants can offer diverse financing products, including 0% APR deferred interest for 6-48 months, revolving lines of credit, installment plans, and lease-to-own offers, all on a single platform. This payment flexibility helps merchants increase order values while providing consumers with more accommodating payment terms.

By offering Buy Now Pay Later options, merchants gain a competitive edge due to the flexible payment choices provided. It’s not just about offering a wide range of products; providing an additional payment solution at checkout is equally essential. Embedded lending aims to give consumers more accessibility to purchasing desired products wherever they shop.