Mollie’s Weekly Ecommerce Tip: #4 Offer a “Buy Now, Pay Later” option. – Press releases

The following text is taken from a press release and in no way reflects the opinion of the editorial staff.

Black Friday (November 25th) and Cyber ​​Monday (November 28th) started in the United States and became two unmissable days in Belgium. The numbers show that smaller retailers saw their Cyber ​​Monday 2020 sales increase by 501% compared to average daily sales in October. Global Black Friday sales were around $188 billion in 2020.

To help traders make these shopping days a real success, Mollie, one of Europe’s fastest growing financial service providers, has come up with some tips. Each week, they share with you a tip that will help you optimize your platform, increase your conversion rate, and drive additional sales. This week’s tip: offer the “Buy now, pay later” option.

Amazon offers it, PayPal has revamped it, and Klarna has expanded it. There’s no denying it: the “Buy now, pay later” (BNPL) system is mandatory. Don’t you know yet? With BNPL, customers first place an order and then pay for it. This can be done all at once or several times, usually for free.

This payment method is not new, but it is becoming more and more popular thanks to a wave of new providers around the world. Figures from Mollie, one of the fastest growing financial service providers in Europe, show that the number of BNPL payments increased by 793% in 2021 in Belgium compared to the previous year. This increase is not just due to the wider use of BNPL payment methods by more merchants, the average number of BNPL payments per merchant has also increased by 366%. According to a study by Allied Market Research, the global size of the BNPL market was estimated at €80 billion last year and is expected to reach €3.5 trillion by 2030.

Benefits of Buy Now with Deferred Payment

– For online merchants:

Merchants prefer customers to pay in advance, but consumers like extra security, especially if they want to make an expensive purchase. The BNPL method offers more flexibility, which ensures higher conversion rates and average order value (AVC). It also improves the customer experience and makes it possible to reach a new target audience: those who prefer to pay after the fact. Thanks to this method, expensive items are sold more easily. In fact, customers can pay in several installments or all at once, at the time that suits them best.

When using payments as a marketing tool, the BNPL option is a valuable tool to achieve higher conversion rates and added value. Introduce the payment method early in the customer journey so potential customers feel comfortable paying later, like when they receive their paycheck. It’s an effective way to encourage customers to make a purchase.

– For consumers:

There are several reasons for the popularity of this method. Flexibility is undoubtedly one of the most important. Customers can choose to pay in installments and often decide how long they want to take. Younger users explain that they prefer BNPL payments to credit cards.

The BNPL solution also offers more security. Customers place their orders, return what they don’t like, and pay only for what they actually keep. Credit cards are avoided and expensive items are more easily purchased.

Responsible use of the “Buy now, pay later” option

When using the BNPL payment method, customers get into debt, like with credit cards, borrowing and going into the red. While it’s always safer to save, sometimes it’s impossible to avoid debt, as in the case of expensive emergency repairs to a broken heating system or a leaky roof after a storm. Debt, therefore, is not necessarily bad, but it is a financial tool that must be used wisely.

Therefore, it is important to inform customers of the following:

– Full terms and conditions

– A comprehensive payment plan

– Advice not to spend too much

Competition

To stay ahead of the competition, many e-commerce companies are required to offer the BNPL option. Customers expect online merchants to offer all payment methods. Not offering them can lead to a higher cart abandonment rate. This is especially true for industries where the method is most used, such as fashion, technology, beauty and retail.

Clarity for greater confidence

It is clear that the BNPL method is here to stay. This payment method is becoming more and more popular and is a great way to give your customers more flexibility. When doing so, it is a good idea to provide all the information necessary for its use. In fact, clarity of operation builds trust between you and your customer, which leads to an increase in conversion rate and encourages customers to return to your website.

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