How Does Buy Now, Pay Later Dominate the Online Shopping Industry?
Over a decade online shopping has explored many trends and transformations. Nowadays, the implementation of the Buy Now, Pay Later, solution is showing inspiring results in this sector. Many retailers are likely to add the BNPL option to take the lead in the market.
Besides that, within no time the BNPL app solutions have become the customer’s favorite. Being a cutting-edge service prevents the use of traditional payment methods. Particularly, the demand for BNPL has risen post-pandemic. So, if you are planning to build an online shopping app, consider incorporating BNPL for easy checkout.
In this article, you will learn everything about BNPL and how it will affect your online shopping activities. Firstly, let’s begin with the meaning of BNPL.
What does Buy Now, Pay Later Mean?
The Buy Now, Pay Later (BNPL) is an impressive payment solution. It provides you with the flexibility to purchase without actually making a payment from your wallet. It works as a credit limit to make payments for any purchase online or in-store. But it is completely different from credit cards.
Today, there are many BNPL providers such as Klarna, Affirm, PayPal, etc. They have millions of users globally who perform transactions through their BNPL services. You can also subscribe to their service and manage your shopping proficiently.
Aside from that, such BNPL apps basically pay on your behalf and give you the privilege to make repayments in smaller installments. The duration of the repayment is also predetermined. It is gaining immense popularity in the online shopping market.
How does BNPL Perform?
The concept of buy now, pay later is firmly stood to increase the purchasing capacity of customers. By choosing the BNPL option during checkout, customers can split the total cost into equal installments. Customers can pay the full amount in weekly or monthly installments.
Unlike credit cards, BNPL offers you an easy repayment solution with interest-free payments. You will get to make payments in four installments. The charges will be imposed only if you fail to make the payment during the predetermined duration.
Repetitive payment failure can result in the refusal of BNPL services in the future. However, the merchants who have integrated the BNPL service will pay a certain commission with the fixed cost.
Emerging Stats on BNPL Market Size and Online Shopping Trends
Moving ahead, the statistics of BNPL are ruling in online transactions. It indicates that now is a great time to develop a buy now pay later app. Because the market will assist you to expand the customer base of your application rapidly.
- Insider Intelligence reported that almost 75% of BNPL users are Gen Z or millennials in the USA.
- GlobalData says the worldwide transaction value for BNPL payments will cross $576 billion by 2026.
- Among all the age groups, 34–44 years consumers use BNPL solutions with a 50.1% share in the US consumers of BNPL service utilization.
- The global buy now, pay later market is predicted to expand by $41.83 billion from 2022–2026. Due to the increased popularity of online payments and the purchase of luxury goods.
- The rapid growth of the BNPL industry is forecasted to surpass $3.27 trillion by 2030.
- As per Juniper Research, the total number of Buy Now Pay Later users will exceed 900 million globally by 2027 which will increase from 360 million in 2022.
Furthermore, customers and retailers are substantial factors in transforming online shopping. These two parties are responsible for such massive growth and expansion of BNPL applications. Keep reading to learn the significance of BNPL for customers and retailers.
4 Reasons Why Customers Prefer BNPL for Shopping
With the surge of online app development, the customer’s shopping tendency has increased. Moreover, the BNPL solution works as a cherry on the cake in that. It is the ideal way to handle financial transactions effortlessly. Here are some of the impactful reasons for using BNPL.
1) Affordable alternative
The BNPL app solution is considered an affordable alternative to traditional credit cards. You can easily make your purchase and repay the amount without paying interest or late charges. So, it is becoming the primary pick of customers for online shopping.
Even if the amount is beyond the budget, BNPL is a good choice. It assures customers of using their service and fulfilling their desired purchase.
2) Interest-free payments
The interest-free repayments in equal four installments are the center of attraction. It permits them to manage their online shopping effectively without the hassle of extra charges.
3) Flexible payment method
The BNPL approach is quite a more flexible method than other payment solutions. It eliminates the traditional credit card practice and enhances the overall features. Whether you want to make online purchases or in-store payments, BNPL is a ready solution to make payments upfront. So, you can avail the timely delivery without any delays.
4) Better Convenience
The ease of use and quick approval are the major features that shoppers are crazy for. Without any difficulty, you can utilize BNPL services 24/7 from any location. It allows them the comfort of online payment through their home.
How is the BNPL App Solution Fruitful to Retailers?
As mentioned above, the customers are absolutely amazed at BNPL solutions. Its rewarding benefit simplifies their buying decision. So, incorporating the BNPL at your store and application increases their interaction with your business. Let’s have a look at the profitable benefits for retailers.
1) Attracts new shoppers
The main intention of retailers is to grab the attention of more and more customers. BNPL took that aspect too seriously and made the service a significant benefit for them.
As a result, today customers, especially online shoppers are becoming fans of BNPL. They prioritize the BNPL app solution for every purchase.
2) Optimizes customer experience
Customers undoubtedly look for an online app that offers a better experience. It is important to gain their trust and build longer relationships. Being a retailer, you can provide rewards and cashback on BNPL service utilization. It keeps customers’ interest intact and allows them to perform BNPL transactions in the near future.
3) Boosts conversation rates
After the widespread use of BNPL services, the number of abandoned shopping carts has decreased. On the other hand, businesses have witnessed a drastic boost in conversation rates. Kudos to the Buy Now, Pay Later app solution, customers’ shopping habits have been influenced remarkably.
With the declining traditional payment methods, BNPL is the ultimate online shopping trend. It has the potential to overcome the drawbacks of credit cards and other traditional solutions. Making the high paced sales for retailers, BNPL is the first choice of many startups to integrate to build an online shopping app.
Yet, you can also make your business drive to the technological world with BNPL. Starting your BNPL app will be a favorable and profitable option. The above statistics show its necessity and future market size. Remember to hire mobile app developers with comprehensive experience in the industry. So, get started now with your research and make a worthwhile BNPL app!