Buy now, pay later platforms are like a virtual helping hand for businesses.
They foster sales by providing a way for customers to purchase an item when they need, paying it off as they go. With benefits like instant payments and reduced customer returns, it’s easy to see why so many businesses are partnering with a BNPL provider. When it comes to choosing one for your business, what questions should you be asking?
What are your payment terms?
If you’re looking to introduce a buy now pay later (BNPL) program into your business plan, choosing one that aligns with your brand and business objectives is important. As a business owner, knowing when and how you will be paid, and the details of any fees associated with the service, is key to keeping your business running smoothly.
For example, with a provider such as Openpay, you’ll get paid upfront – you’ll be paid the purchase price minus Openpay’s merchant fee; you’ll receive a refund if your customer returns an item (on almost all merchant fees); and you’ll pay no sign-up fees.
You should also note whether there is one provider that is better established in your industry, as some may specifically tailor their policies for different business models.
What is the length of repayments for customers?
Customers who purchase an item from a business using a BNPL service are offered varying repayment options depending on the provider, and in some cases, the amount spent.
For some, a deposit is required at sign-up, with instalments then required every few weeks over a set period (such as every fortnight). These repayments are usually direct debited from a nominated account, making it easy for the consumer to pay on time.
Providers like Openpay offer consumers interest-free plans with repayments required every 2 weeks. It’s up to the customer to choose how long their plan takes to pay off, with options of between 2 and 24 months available, however this depends on plan length and amount spent.
Is it easy to integrate a BNPL service as part of my store?
Once you’ve decided on a BNPL provider for your business, you will need to apply to sign up for their service through an online merchant application. This is usually completed via your chosen provider’s website, and will require details including your ABN, annual corporate turnover, and examples of products you want to sell via BNPL.
As part of this process, you will be required to list your sales system and whether or not your business offers online purchases. This is then considered by the BNPL provider, who can determine if and how they will work with your system, both in-store and online.
What are the other benefits of BNPL?
If you’re still unsure whether BNPL is for your business, below are some additional benefits of engaging a provider. They include:
No outstanding invoices – Receive payment for a purchase soon after it is made with no risk of the money not being paid.
Boost your average transactional value (ATV) – The smart and flexible nature of BNPL plans can increase customers’ ATV because they are able to spread the cost over multiple weeks.
Reduce customer returns – By taking an upfront payment, the likelihood of an impulse buy and post-purchase regret decreases.
Increase loyalty – The customer-centric model of BNPL can help increase brand loyalty and keep consumers coming back.
Name recognition – Many BNPL providers are well established in the e-commerce world and associating your business with them can help add credibility to your service or products.
So, if you’re considering introducing a BNPL program as part of your business, make sure you do your due diligence and find a provider who will look after you and your customers. Learn more about how Openpay can help your business today.