With BNPL, consumers can pay for products in affordable monthly instalments instead of paying the full price at once. The shop now pay later alternative does not incur any extra fee or interest, despite enabling consumers to spread out the payment of their entire purchase over a period of time, as long as they pay off their balance on time
E-commerce businesses are reaping the benefits of BNPL with improved conversion rates, higher customer acquisition and remain competitive in the e-commerce space.
Let’s take a deeper look at why Malaysian e-commerce businesses should add BNPL option to their business platform.
1. Boost sales
People are often mentally and emotionally ready to make a purchase, but they cannot do so financially. As an e-commerce store owner, you can convert more website visits from ‘window shoppers’ to paying customers if you offer flexible payment options like BNPL.
Customers from all walks of life will be drawn to your e-commerce store if you offer the BNPL option. This payment method will be extremely helpful for underserved or underbanked consumers who do not have access to a credit card to pay for their purchases.
Allowing your consumers to pay in instalments allows them to complete their purchase without worrying about the entire cost. If you add the BNPL option to your e-commerce platform, you will likely see a substantial boost in sales conversion rate.
2. Attract new customers
Because acquiring new customers takes so much time and effort, make those efforts worthwhile by giving potential customers the options they want when it matters most – at the checkout.
You may have the greatest SEO strategy or social media campaign in the world, driving new consumers to your site. Still, if the checkout process isn’t seamless or doesn’t accept various payment options, these potential customers aren’t likely to convert.
Allowing customers to buy now and pay later can help you attract those who are interested in your products but are unable to pay the full amount right away. This is particularly true if they are not required to pay an additional fee.
It’s becoming a more popular alternative to credit cards.
3. Provide customers with a cost-effective financing option
E-commerce businesses that offer their customers BNPL, a cost-effective financing option, can enjoy long-term business growth and repeat purchases. Moreover, your customers will also be more inclined to recommend your store to their friends and family.
Not only is BNPL more accessible and convenient to ordinary consumers, it also allows them to get short term credit without having to build balances on credit cards that charge interests on the outstanding balances at the end of the month.
Certainly, some credit cards in Malaysia do offer credit card instalment plans with zero interest, but only customers with a good credit score are able to use this facility.
4. Reduce cart abandonment
BNPL can help businesses do more with e-commerce, all while reducing the impediments to checkout that create abandoned carts.
myIOU provides a best-in-class experience for both customers as well as retailers. With myIOU, customers can use a BNPL solution that ties into not just their existing credit card but debit card as well.
When shoppers use BNPL, they end up completing their transactions far more often, and more frequently too and businesses can turn abandoned carts into bigger, more frequent sales.
5. Increase customer lifetime value (CLV)
The total amount a person spends at your business throughout their lifetime as a client is known as customer lifetime value (CLV).
Because the cost of acquiring new consumers has increased by more than 50% in the past years, retaining your existing clients is becoming more important.
Customers will not only be able to spread out their payments over a longer period thanks to BNPL, but they will also be more involved with your business that leads to increased customer retention rates.
You can build trust and brand loyalty and promote repeat transactions by offering BNPL as one of your payment options.
Long-term ROI Benefits
Accepting digital payments is a great method for companies to keep up with ROI and develop a solution for cart abandonment especially during the pandemic.
With so many pay-as-you-go options available, e-commerce merchants can partner with a buy now pay later solution provider to improve new sales, repeat sales and even customer experience.