E-commerce Businesses Adapting to Buy Now, Pay Later
E-commerce Businesses Adapting to Buy Now, Pay Later
The concept of installment simply means you pay a sum of money due as one of several equal payments for something, spread over an agreed period of time.
As the e-commerce industry is evolving and thriving, many brands now do offer installment plans for products that they are offering. Among the installment options available in Malaysia are Atome, Hoolah, Paylater by Grab, Pace and many more.
Why the idea of Buy Now, Pay Later (BNPL) is quite famous within consumers and adapted by many businesses. Let’s dive into this now!
Consumers are opting for BNPL over traditional credit cards.
Credit cards are not meant for everyone, especially for those with less self control. Now, many people, especially younger generations, are trying to avoid using credit cards, opting for BNPL to make larger purchases. It is still a better option considering there is interest-fee (only late fee charge if you missed your payment).
BNPL is much more convenient compared to credit card. You can change small transaction as low as RM100 into installment and make payment within the allocated time, which is normally 3 months. And guess what, it is also interest-free!
Affordable Financing Option
As millennials in particular have the fastest-growing debt load, BNPL is a more affordable financing option. Compared to credit card, BNPL seems a more affordable and better option – given that the customer is meeting the payment deadlines set by the payment provider.
Another fact about BNPL is it typically has a less strict approval process for shoppers, requiring only a soft credit check or no check at all. Generally, BNPL has no interest fee, only late charges they are not able to deduct from your banking account according to the due date.
Offers more convenience and flexibility
Do you ever have a desire to buy something but you’re worried about shelling out a big sum of cash? BNPL is surely an alternative to other payment methods. There are many more big name merchants that have offered this payment option such as Zalora, Shein, Machines, Fashionvalet, JD Sports and many more.
Despite the convenience, it all goes back to a person’s capability to shop as the more installment you took through BNPL, the more commitments that you have towards paying it for the next 3 months. Convenience comes with accountability towards the purchases you made.
BNPL can reduce cart abandonment.
BNPL does reduce cart abandonment. Usually when people add things to cart and realize that they somehow lost interest or can’t afford to buy later. One Mastercard study revealed that implementing BNPL can reduce cart abandonment by 35%. That shows how BNPL plays quite a big factor for consumers before they decide on the item to purchase.
The most common reason consumers give for abandoning carts is that they were just simply browsing or window shopping.
In a nutshell, the concept of Buy Now, Pay Later is one of the good adoptions for businesses. It does add value to the business as it provides more payment options. Customers will also very pleased with this kind of payment installment for their purchase as it helps to stretch their money a little bit more.
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