Buy now, pay later … benefits for your business

• Business News
• Growing a Business

It is rare to step foot in a retail store or shop online without seeing an option to ‘Buy Now, Pay Later’ at the checkout.

With a wide range of providers offering this payment service such as Afterpay, Humm, ZipPay and Wizpay, the Buy Now, Pay Later options make it even easier for the customer to make a purchase without paying the total price upfront.

Instead, the shopper pays one installment at the time of purchase and pays the remaining balance in interest-free installments over a pre-set period, while businesses are paid the total amount at the time of purchase.

Benefits for your business

Though all Buy Now, Pay Later providers take a percentage of your profit, there are some key advantages to including these services as a payment option.

Increased Sales

Since the introduction of Buy Now, Pay later payment options for customers, large retailers are minimising the need for the Lay-by schemes, seeing more profit and larger purchases through this new method of payment.

Many retailers — including America’s largest, Walmart, have done away with or scaled back (lay-by) programs. One reason is shoppers have new tools at their disposal to spread out payments.

A popular option for consumers are Buy Now, Pay Later plans. The point-of-sale loans are easy for retailers to manage, and research shows these options lead to bigger baskets and greater customer loyalty.

RBC Capital Markets estimates a Buy Now, Pay Later option increases retail conversion rates 20% to 30%, and lifts the average ticket size between 30% and 50%.

CNBC.COM

No Outstanding Invoices

As your business gets paid in full at the time of purchase, there is no risk of an invoice not being paid.

Your Business Remains Competitive

It is essential businesses stay at the forefront of customer expectation at the point of the sale.

Buy Now, Pay later options have become an essential offering for E-Commerce and retail outlets across Australia, so the risk of falling behind and losing sales becomes a factor for those businesses choosing not to offer this service.

If your business is considering offering a Buy Now, Pay Later service to customers, be sure to research the provider that suits your business. Look at others in the same industry as your business and consider the fees and charges associated before committing.

What to consider before offering Buy Now, Pay Later in your business

Buy Now, Pay Later services can increase business revenue and attract new customers, but there are a few things to keep in mind when considering the payment type or choosing between providers.

Price of your product – some Buy Now, Pay Later providers have a minimum order amount. Compare the different options to make sure your products can be sold using the service.

Payment terms for your customers – it’s important to remember that Buy Now, Pay Later services involve your customers taking out a loan with the service provider. Make sure you feel comfortable with this model before offering the service.

Fees and charges – in exchange for offering customers interest free payment plans and loans, Buy Now, Pay Later services take between 2% and 8% of the purchase price from the sale. Compare rates and choose the best platform for your business.

Source: Business.gov.au

Find out more

Looking at growing your business? Chat with the team at Elevate Accounting on 08 9460 1040 or click HERE for more information on how we can help grow and enhance your business.