If you haven’t heard any of the rage about the pay later solutions for e-commerce businesses, then you’re out of the loop! E-commerce payment plan options are leading the way in turning window shoppers into long-term customers.
Benefits to Payment Plans
In simple terms, payment plan options give your customers the option to buy now and split their payments into smaller installments over the course of a few weeks time. Many merchants who have installed a payment plan system for their online stores have seen an overall increase in sales and purchase amounts. Offering customer financing options can seem overwhelming for a small business, but there are a number of ways to make sure the system works for your business. We’ve put together a list of payment plan options that take the brunt of the financial burden by offering your customers the loan but paying you the complete purchase price upfront.
The Catch To BNPL
Buy now, pay later options seem too good to be true- how are they benefiting in the process? BNPLs do make money from both sellers and consumers. When customers make their purchase, the full purchase price is paid to the merchant minus the flat fee and variable percentage rates per purchase. Flat fees and percentage rates vary by provider. You should always shop around to see which payment plan options are offering the best rates.
Leading Payment Plan Options
Afterpay, Klarna, and Shop Pay are three of the leading payment plan options for business owners to take advantage of.
Afterpay: This BNPL is different from traditional payment plan options available to e-commerce customers because it does not run credit checks. Basically, your customer applies for a short-term Afterpay loan at checkout. They are approved for a certain loan amount, which may or may not cover the entirety of their purchase amount. If your customer is not approved for a loan large enough to cover their entire purchase amount, they will need to pay a larger first installment at checkout. Installments are debited from customers on a bi-weekly basis automatically, and customers are charged late fees when the payments are unsuccessful.
Klarna: With over 400,000 business partners, Klarna is a very well-known payment plan option. As a bonus for using their service, Klarna even drives website traffic to businesses that partner with them.
Affirm: This BPNL allows customers to make purchases from $50–$17,500+ and come with a range of term length options. They also pay merchants quickly within 1-3 days of when your customer makes their initial payment. You have the option of allowing shorter payment terms with 0% APR or the later - whichever works best for your business structure.
While there are other options available, the three we’ve provided are among the largest and most well-known buy now pay later providers. Sift through a few of the well-known payment plan options before committing to one, and you’re sure to see a significant increase in your store sales. For all of our fellow Wix users, you’ll be happy to know that Wix offers ready-made integrations for many of the well-known BNPL options. Start offering your customers payment plan options today!