28 October 2022

What you should look for when choosing a BNPL provider

The BNPL marketplace has revolutionised the e-commerce world. As a merchant, it can be a hard to know what’s important when choosing a provider for your business. That’s why we’ve pulled together a guide on the things you should think about before making a decision.

The buy now, pay later (BNPL) marketplace has revolutionised the e-commerce world, making more purchases easier for more customers.

As a merchant, it can be a hard to know what’s important when choosing a provider for your business. That’s why we’ve pulled together a guide on the things you should think about before making a decision.
Flexible payment terms for customers

As a merchant, consider the payment terms that will appeal to your customer base and target demographic. Typically, instalments are required on a regular basis over a period defined by the provider. However, this can differ based on your BNPL service. Choosing one that aligns with your company’s needs will ensure customer satisfaction and can even help drive sales.  

For example, if your business specialises in big ticket items, such as cars or appliances, a longer payment time may be desirable for your customers to repay the amount required. A BNPL provider like Openpay can offer a payment plan of up to 24 months. 

No hidden fees for customers   

Despite its vastly positive uptake, some customers remain sceptical about BNPL services, which makes it important to choose a provider with no hidden fees. As a merchant, keeping consumers on side and likely to come back again is essential to your business’s ongoing success.  

With a BNPL provider like Openpay, customers pay no interest and are notified at sign-up about the 3 main costs associated with the service: 

Deposit – Customers are required to pay a 20 per cent deposit for purchases under $2000 and a 10 per cent deposit for purchases over $2000. 

Plan management fees – These may vary depending on the plan and price of purchase, but is guaranteed not to exceed $5.00 per fortnight. 

Late fees – A capped fee of $9.50.

Other fees to look out for when deciding on a BNPL service might include sign-up fees and processing or account fees. Openpay, however, does not charge for sign-up fees.  

If a certain provider is better for your industry  

Many BNPL providers have tried to define themselves from one another by establishing a presence or reputation in a certain industry. For example, a lot of merchants who engage Openpay are in the automotive and health fields. These merchants sell higher-cost items, such as a new set of tyres or dental services, and in turn, Openpay offers customers a typically longer payment period. But if your business specialises in smaller, less expensive products, this might not be necessary.  

How a provider will support (and grow) your customer base 

At a high level, the goal of offering a BNPL service within your business is to make it easier for customers to buy your products. Ensuring a BNPL provider is going to support, retain and grow your wider customer base is also front of mind for merchants. 

With a provider like Openpay, allowing your customers to spread their repayments over a range of plans and payment alternatives can help support them with cashflow, particularly on those larger purchases.  There’s no more waiting for payday or missing out on a sale due to low funds. As a result, there’s also a higher likelihood of increasing the Average Transaction Value (ATV) of a sale, as well as the customer returning for future purchases.  

Think about how a BNPL provider will make it easier for your customers, from both a purchasing and repayment perspective. Will offering such a service appeal to a specific customer base or a wider demographic, by way of opportunity? How will it improve their overall satisfaction? This should be top of mind if you’re wanting to grow your customer base. 

What’s in it for you

Finally, when choosing a BNPL provider, work out what the benefits are for you and your business. Think about how a BNPL provider will improve your turnover, as well as any additional costs or work that will have to be completed to ensure the success of the scheme. 

This includes when you will be paid and what portion of a sale you will receive; how you will integrate the BNPL scheme with your existing business systems; the fees associated with signing your business up to offer a BNPL service (sign-up, commission and service fees); and how you will manage the customer service side of BNPL.  

Offering a BNPL option as part of your business can help boost sales and appeal to a wider customer base. It’s important you understand the ins and outs of a provider’s service so you can find one that suits your needs and gives your customers the best deal.  

If you’re interested in learning more about a smarter way to pay, learn more about Openpay.