By Sherrie Bryant
VyaPay
Retailers have long understood the value of offering instant options at checkout, both in stores and online, by accepting digital wallets, local currencies, loyalty points, touchless payment methods or installment plans at point of purchase. Over time, checkouts became more and more fluid in response to consumers' nomadic, digital lifestyles. Consumers embraced buy online, pick up in store (BOPIS), mobile in-store checkouts on personal devices and sales associates' POS tablets, curbside checkouts and order ahead.
All of these behaviors accelerated during the pandemic by enabling shoppers to safely patronize their favorite stores and restaurants. Buy now, pay later (BNPL) grew exponentially during this period.
BNPL has been compared to layaway, installment plans and other types of retail financing, but its pricing, risk models, technology and customer experience are different. Most BNPL service providers pay merchants in full upon purchase while allowing approved customers, who agree to monthly payments with no added fees, to take immediate ownership of a product or service.
Approvals are also immediate. Modern BNPL solutions are powered by advanced algorithms, artificial intelligence and machine learning; deployments have been mostly seamless.
The Economic Impact of Buy Now, Pay Later in the US, a September 2021 independent study by Accenture that was commissioned by BNPL provider Afterpay, cited the following benefits researchers attributed to BNPL deployments:
Full study results can be found at https://bit.ly/37u3Zl8.
BNPL provides shoppers with immediate access to products and services without paying the full value upfront and without added fees if payments are made on time. This cost-effective alternative to traditional credit methods gives consumers a budgeting tool, Accenture researchers noted.
"As a result, the number of BNPL users in the US has grown by more than 300 percent per year since 2018, reaching 45 million active users in 2021 who are spending more than $20.8 billion," researchers wrote. "This is equivalent to 2.4 percent of US online retail and 12 percent of US online fashion retail. It is estimated that BNPL users in the US will gain $1.6 billion in surplus value from using BNPL services in 2021."
Researchers also noted that continued growth of ecommerce and digital payments is reflected by changing consumer preferences, which increasingly favor interest-free borrowing and budgeting features over traditional credit options.
BNPL works best as part of an end-to-end digital commerce solution powered by integrated technologies. Its advanced capabilities can complement your family of solutions by driving instant approvals, recurring revenue and sustainable financing options at point of purchase.
Your payment facilitator partner and payment gateway provider can help you customize and embed a BNPL solution in your technology suite to make it a seamless extension of your services and brand.
For more information on buy now, pay later developments, see the following articles from The Green Sheet archives:
Sherrie Bryant, director of marketing at payment solutions provider VyaPay, is a senior marketing executive with over two decades of experience. She has a track record of success in creating and leading effective marketing organizations with emphasis on channel management, partner relationship management, and business development activities in the payment and POS space. She offers expertise in finding, building, and leveraging relationships that power revenue growth. Contact her at sherrie@vyapay.com.
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