Buy Now Pay Later (BNPL) allows customers to check out a purchase without making immediate payments. They can pay later in a series of installments.
Pros of BNPL for businesses
1. Providing easy Access for Customers
Due to BNPL’s flexible payment methods, it is accessible to a wide range of customers. They can complete their payments conveniently. Financial businesses offering BNPL can gain more sales through the platforms used. Due to its wide-ranging accessibility, companies can increase conversion rates at scale.
2. Businesses can attract new customers
Financial businesses and banks offering BNPL can attract new customers who prefer this payment method for their financial management. BNPL services in payment services can also help customers gain many offers and rewards, which boost their engagement with the business more. This way, companies can build a strong customer base.
3. Optimizes and Improves Customer experience
BNPL helps financial businesses improve their customer experiences by giving customers opportunities to manage their payments conveniently. This payment service is open to a broader audience segment, which attracts customers to use it anytime. Factors like flexibility, convenience, and low fees boost customer experiences at scale.
Cons of BNPL for businesses
1. Integration challenges
Many businesses face integration challenges while implementing a BNPL payment method. BNPL platform demands proper resources and tech for a seamless integration, which becomes difficult to manage and align for some businesses.
2. BNPL services cause consumer debt
It is one of the larger risks of BNPL for businesses, contributing to customer debt issues, which affects businesses, too.
Due to heavy debts, businesses are unable to track debt amounts and data for customers, resulting in payment defaults. This may cause businesses reputational damage due to the negative impact of the company’s net income.