"Buy now, pay later". Klarna, Afterpay, Splitit, and other BNPL services' overview
Buy now pay later (BNPL) service allows customers to get the product immediately while breaking the cost into several deferred payments at no extra fees. Three stakeholders take part in the process:
- customers who don't have to wait for their income to purchase their desired products;
- merchants that increase their revenue in real-time;
- BNPL providers that charge merchants for their service and customers for the payment period overdue.
Shortlist of benefits of adopting a BNPL service for your store
- It increases average order value, conversion rate and reduces cart abandonment.
- BNPLs appear more transparent to customers as they tend to avoid credit card payments with their unclear fees.
- That's an effective and cheap way to acquire new customers.
- Chargeback protection. BNPL provider is the one who pays for the order, so the customer cannot initiate a chargeback with the merchant.
Current situation on the market & prognosis
- More than a third of the US shoppers have used Buy Now Pay Later service at least once.
- The most promising age group of potential customers is somewhere between 25-44 y. o. People who are 54 and older are unlikely to buy anything with a BNPL.
- The most popular motives to use BNPL are to buy an unaffordable product and avoid credit card fees.
- The most common product type is electronics.
- The Worldpay Global Payments Report shows that the market share of the BNPL method is constantly growing and will most likely double by 2023.
Is every BNPL the same?
Every BNPL provider serves just one purpose — to increase customers' payability while helping merchants grow their business. However, there is a ton of tiny differences from the merchant's perspective. Every provider has its own transaction fees, commissions, list of countries it operates with, payout time, maximum order total, number of active users, and more. We've picked up the most popular BNPL providers and created a comparison table to help you sort this out.
OK, now you do not need to surf the web to check each provider's offers and documentation notes. You can spend this time making a decision or enjoying a cup of good coffee. In the meantime, the BNPL users will slightly grow in numbers, and more and more merchants will capitalize on it. Don't miss a chance to increase your income and start working with the BNPL providers and Checkify that suit your needs.
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