The digital landscape today has allowed consumers to realize that there are multiple ways to satisfy their needs. Not only do they have a wide variety of products available to them through the online marketplace, but they also have more breathing room when paying. Thanks to better technology, we now have loans such as point of sale financing and consumer financing.
Merchants can use these flexible payment schemes as a way to keep a loyal base of customers. One of the most popular options is Buy Now Pay Later, or BNPL. In recent years, it has become an effective way for shops to keep their buyers around even as prices climb.
The Effects Of Point Of Sale Financing And Consumer Financing
Two options that buyers have in terms of flexible payment are point of sale and consumer financing-the former functions as a kind of loan for products that are for everyday use. Point of sale financing removes the need for a credit card since the lender is aware of the type of purchase the borrower makes. There is also no application required for transactions like these.
Consumer financing, meanwhile, refers to deals between a merchant and their customer. Here, they allow the buyer to purchase the item without paying right away. The shop covers the upfront expenses while the customer pays at a later date. Both point of sale and consumer financing allows people to purchase items without high interest fees. They have also encouraged healthier relationships between merchants and customers because of the freedom of choice they add.
The Bnpl Phenomenon: Instant Financing Done Right?
For people who are apprehensive about debt, BNPL and other online financing options are too risky. But a 2017 survey from Mintel Comperemedia indicated that 76% of consumers are more likely to buy items that have flexible payment options. The buy now, pay later mechanism is a strategy that has worked for merchants over the past few years.
The financing option is enjoyed by many younger buyers due to the fact that it allows them to know the exact costs and how they can plan for the billing date. Customers have the option to pay in increments, which means less of an upfront cost.
A BNPL option allows consumers to spend more without having to pay in one go. Besides this, it differs from using a credit card or taking a loan since there is no intermediary. The merchant deals directly with the customer to work out terms that are ideal for both. This type of transaction fosters a healthier relationship with the customer base, helping merchants grow as a business.
Not A One Size Fits All Solution, But A Step Forward
Even though BNPL offers a more flexible way for payments, it is still not a perfect solution to customer demands. It is a step in the right direction, however, since customers are beginning to relax in terms of making high-value purchases. The transparency in a BNPL helps them plan out how they are going to spend their money in a certain period. For some people, this is a sustainable way of looking at finances.
Merchants implementing a BNPL solution make use of online platforms like ChargeAfter.com. These portals are clear and easy to follow. After all, a complicated e-commerce channel will only turn off potential buyers. Accessibility is one of the biggest draws to instant financing, which is why merchants must maintain convenience.
BNPL is also seamlessly integrated with most major retail systems. People can easily follow the steps flashed to them on screen, encouraging them to continue with the purchase. The advisories and reminders are also usually done by emphasizing flexible payment methods. This is compared to other transactions where the upfront cost can be intimidating to the buyer.
The customer experience is very important to the growth of a business. While one can argue that people who avail of services are already prioritized, there are still aspects that can be improved. A buy now, pay later approach may be advisable for those looking to purchase an expensive product right away. This allows customers to avoid large fees without having to abandon the items in your online shopping cart.
And for the merchant, it is a sign of trust and goodwill to have a BNPL option. As more customers embrace this type of payment method, it is only right that shops develop and adapt.