Buy Now Pay Later: Ensuring choice and flexibility in payments

Buy Now Pay Later – What is it all about?

Did you know that selecting a payment method is one of the most critical parts of the customer journey? Any friction with the payment process or the lack of payment options at the checkout will likely result in lost sales. A shopper or visitor is not a customer until they go through the entire funnel and finally submit payment and are approved. Did you know that cart abandonment rates are one of the biggest problems for online merchants? In fact, 81% of shoppers abandon their carts online before they complete their purchase. A valuable way to combat cart abandonment rates and become more appealing to your consumers is by offering alternative payment methods and instant and flexible credit options from multiple lenders to ensure flawless user experience and promote a safe checkout.

Point of Sale Financing or “Buy Now Pay Later” is an alternative payment method that is offered alongside other traditional payment options. Instead of racking up credit card bills, consumers are able to receive financing options, live at the point of purchase. Point of Sale Financing or Buy Now Pay Later, can help alleviate friction for shoppers who do not have the room on their credit cards or who do not want to apply for a new card. Consumers benefit from accommodating terms, controlled payments, a set pay-off date, and 0% APR vs. traditional cards that can carry 17% APR’s on average. 

Installment Buy Now Pay Later financing has been on the rise over the past few years and has rapidly turned into a standard payment option by shoppers of every age. Buy Now Pay Later solutions have been proven to increase sales for merchants by as much as 35% as consumers are more attracted to the idea of taking short-term installment plans to conserve cash and control budgets.

ChargeAfter offers a “Multi-lender” waterfall platform to deliver personalized financing options at the online checkout from more than 10 lenders. ChargeAfter network of lenders specializes in Point of Sale Financing across every credit type (prime, near-prime and subprime) and approves between 80 – 85% of all applications in less than 2 seconds. In a fragile economic environment like now, it’s imperative to provide a stable and robust financing program and one that is able to and knows how to service and approve consumers across every credit type. Buy Now Pay Later Point of Sale Financing platforms should be expected to evaluate each consumer, their individual economic needs and their credit type in order to present every consumer with an equal and fair financing option through affordable Buy now, Pay later options. 

ChargeAfter’s eCommerce waterfall was designed for results. Once a financing application is submitted, it is checked against prime lenders for approval. Prime lenders specialize in offering financing to borrowers with great and very good credit with little to no risk involved. If declined by prime, the application moves down to near-prime or “second look” lenders for approval. Near-prime lenders know how to work with borrowers that have “less than perfect” credit and involve more risk-taking to the lender. If still declined, the application is then shared with subprime lenders for approval. Subprime lenders provide specialized financing products to consumers that are in the highest risk groups. Multiple lenders are checked in the waterfall so various rates and terms are available to shoppers once approved. This allows consumers to pick the best-personalized offer for them at checkout. Merchant’s not yet offering a multi-lender waterfall financing platform are giving up 60-70% of their potential sales to their competitors. 

ChargeAfter merchants can offer consumers various financing products across their product lines and categories to include, 0% APR deferred interest for periods of 6-48 months, open (revolving) lines of credit, installment plans and lease to own offers in one easy to use platform.

Think about, it’s much easier to finance a furniture purchase of $1,472 over a period of 18 months rather than it be charged upfront on your credit or debit card. The monthly fees would only be $81 per month and with 0% APR! Merchants benefit from higher-order values and consumers benefit from accommodating payment terms. 

Merchants who offer Buy Now, Pay Later options gain a competitive advantage due to the flexible payment choices being offered. Don’t only focus on offering your consumers a multitude of choices in products, make sure to offer them an additional payment solution at checkout. The intent of point of sale financing is to offer consumers more accessibility to purchase the products they want, wherever they shop.