5 Things You Need to Know Buy Now – Pay Later Plans

The following is a guest post provided by Chosen Payments.

At the beginning of the BNPL boom in 2022, it was anticipated that Gen X and Gen Z would be the ones using BNPL programs. It was also assumed that lower-income consumers would likely be the ones to take advantage of BNPL. However, BNPL plans have been much more prevalent among households earning more than $100,000.

What is BNPL

BNPL is a loan offered at the point of sale offering different options for repayment. Some payment options incur interest. The consumer scans a QR code at the point of sale and seconds later they have a new account ready to use in your store. This encourages customers to spend more money than planned since they can stretch out their payments.

Easy Application Process

Your customer scans a QR code on a countertop sign, completes a two-question application process on their smartphone and their application is processed in about two seconds! The credit check is a soft credit check and that means that there is no inquiry recorded on the consumer’s credit history. Once the account is approved, the transaction continues the same way as any other credit card transaction.

Why Merchants Need BNPL

Offering instant credit for customers who might not qualify for traditional forms of credit can help increase sales through increased spending. It will also help acquire new customers since you provide an easy way for them to acquire products they desire. As an example, a person shopping for a basic toaster oven might consider purchasing a $40 model but upgrade to a combination toaster oven, air fryer and convection oven that sells for $400 if they know it can be financed in seconds.

Building Loyalty

BNPL plans help build customer loyalty. Customers are likely to return to a merchant if they know they can purchase items today and pay for them later. They are also likely to return soon as well as promoting your business to their friends. BNPL truly helps merchants increase sales and attract more customers.

Big Ticket Items

BNPL is a great solution for big ticket purchases such as furniture, appliances, seasonal purchases or unexpected home or auto repairs. Merchants who offer BNPL programs are going to be the first business consumers will call on for these goods or services.

Looking ahead in 2023, we expect to see a continued growth for BNPL. Despite the high inflation we are experiencing, consumers are still spending money and they will spend even more money if they can pay it back over time.