11/26/2020 New Industry news In depth
There are many trends and themes that have risen in ecommerce, some of them expected - where others have been quite unexpected. One of these unexpected risers?
Buy-Now Pay-Later (BNPL). To understand exactly why this payment method is on the rise and act upon it, it’s essential to know the reasoning behind the consumers who select this payment method.
Meeting the consumers needs
Consumers feel an increasing need to purchase their products from webshops that they deem trustworthy. Offering a payment mix that exists of varying payment methods is often a great indicator that a shop knows what it’s doing.
Looking at the market, BNPL apps have shown an incredible increase in popularity over the last year. Data from the United States shows that last year BNPL apps were downloaded 650.000 times in September, this year? 1.4 million times! But why is there such an increase this year? Undoubtedly the pandemic has boosted ecommerce and one of the side effects is that many online payment methods have seen a boost as well. However, flexibility and trust have become essential components of the current ecommerce market. BNPL payment methods have several shopper needs that they tie into exceptionally well:
- Trying products before paying
- Being able to postpone or separate payments
- Returning products before paying
At the moment, around 50% of the online consumer base identify with at least two of the above needs, with an even greater percentage among younger shoppers.
From Millennials to the general population
Originally developed and targeted at Millennials as an alternative to traditional credit card schemes, BNPL is a fast growing payment type allowing flexibility without negative credit being attached to the consumers name. The shift from Millennials and Gen X consumers to the general population has been significantly faster than anticipated, growing nearly 40% y-o-y worldwide. Future projections expect the market to have doubled by 2023, which is twice as much as expected for bank transfers and thrice as much as the digital wallet market.
Why should you offer BNPL?
As BNPL payment methods start becoming more widespread, not offering such a payment method in your webshop is a true conversion killer. To add another interesting statistic, BNPL lowers the purchase threshold significantly, which leads to an increase in first time shoppers. Research conducted in various European countries lists the following reasons as the most important when choosing between webshops:
- Having used a webshop before
- Lowest price
BNPL stimulates first time purchases, which means consumers will be familiar with your webshop afterwards - improving the odds of them returning to you. As indicated earlier, one of the key USPs of BNPL is facilitating the purchase process - letting consumers pay when they want. To add to that, trustworthiness becomes less of an issue when consumers physically possess the product before paying.
Pay after Delivery - Your BPNL solution
While there are many different solutions for BPNL, not all offer the same advantages to you or the consumer. In order to provide a frictionless payment experience for all parties involved, MultiSafepay developed their very own payment solution - Pay after Delivery (PAD).
Due to the in-house development of PAD, MultiSafepay has complete control over the end-to-end payment flow. Consumers will be asked to pay for an order 14 days after they have received the product - with an added option to refund part of the order. Additionally, no negative credit will be associated when consumers choose to pay through PAD.
On the merchant side of things, you need not worry about the payment details as MultiSafepay bears the full risk; which means payout is guaranteed.
Quality is our top priority at MultiSafepay, whether it’s our integrations, customer service or our payment methods - you should expect only the best. As such, you can count on the same level of quality from PAD. Through a dedicated Development Team, PAD is consistently upgraded and adapted to stay tuned to the desires of the market. With the holiday season approaching rapidly, PAD is the ideal solution to get consumers to choose your webshop for their shopping.
Start offering Pay after Delivery today