3. Buy Now Pay Later Options
Buy Now Pay Later (BNPL) services are becoming increasingly popular with online shoppers, so if you’re looking to increase your conversion rate, they're worth considering.
With global inflation and the cost-of-living crisis impacting consumers, it’s no wonder paying in installments is an attractive prospect right now. A recent survey16 found that this year, four in ten consumers plan to pay for their holiday shopping with a BNPL service. Gen Z will be the biggest users (48% of respondents), followed by millennials (47%) and Gen X (40%). In contrast, only 14% of baby boomers intend to pay this way.
The three most frequently cited reasons for using BNPL services are: 1) To avoid paying credit card interest; 2) To make purchases that otherwise wouldn't fit in my budget; and 3) To borrow money without a credit check17.
In general, this is all good news for e-commerce merchants. BNPL incentivizes customers to buy, boosts conversion rates, and increases average basket sizes by 20–30%18. It will also drive up your customer lifetime value – once your customers know you offer a BNPL option, they’ll come back to you for their next big-ticket purchase.
Beware though, there are some downsides – namely, you’ll have to hand over a percentage of sales generated. You’ll need to do some cost scenarios to find out if the benefits to your business are likely to outweigh the fees.
Let’s look at a few of the BNPL options out there: