Best Buy Now Pay Later AppsWho are the Best BNPL Service Providers, from a Merchant’s Perspective?

When BNPL is available, many customers may ultimately spend more than they would have otherwise. Decreasing the financial impact of larger purchases can remove hesitation at checkout and improve your bottom line. Afterpay, for instance, claims its service leads to 18% higher order values.

As mentioned above, BNPL is extremely popular with the public, particularly among Millennials and Gen-Zers. Arguably BNPL options could therefore drive up sales among both groups, which could have a profound impact on sales. To illustrate this, over 61% of shoppers ages 18 to 24 said they had used a BNPL service in 2021. This is significantly higher than the almost 38 percent recorded in a previous survey in 2020.

Whatever you think of it, we are living in a stage of instant gratification. The more checkout options you provide, the more likely you are to make catch customers who may have spent their money elsewhere.

BNPL often makes online purchases easier and more convenient, driving sales in the process. Indeed, offering any one of the leading BNPL companies at checkout may boost eCommerce conversions by 20-30%.

The last thing to remember is that BNPL isn’t only popular, it’s trending. Another study showed that 54% of consumers polled said they wouldn’t have made a purchase if BNPL wasn’t an option. That’s quite an incentive to include BNPL at checkout.

The service provider typically assumes all the risks associated with the purchase transaction. This is great news for you as a merchant. If the customer misses a payment, the service provider is responsible; you’ve already been paid for the transaction.

Even if the purchase results in a chargeback, it would not really be your concern in most cases. Of course, it’s still important to ask any provider how they, specifically, handle disputes and chargebacks.

The service provider is usually responsible for issuing any refunds requested by consumers. As with the above matter, the specifics of how this is done can vary from one service provider to the next.

Some BNPL providers will not issue a refund to a customer until they’ve completed all the payments, for instance. It’s important to get these details and clearly communicate them to customers before a purchase.

Consumers may be unable to recognize your charge on their statement if it appears with an unfamiliar vendor name and dollar value. They may believe the charge is fraudulent and try to fight it through the chargeback process, or seek to recover their funds some other way.

You need to work with the provider to ensure that the charge is easily recognized. Even if it doesn’t immediately impact your bottom line, this could still impact your reputation as a merchant.

You must be approved for BNPL financing in order to offer the method at checkout. BNPL providers will vet their prospective merchants carefully to determine if they fall into a high-risk category or not. If they do, it’s unlikely that they would be approved for financing.

Remember: the more steps you set between a customer and checkout, the more likely they could be to abandon their carts altogether. Also, keep in mind that BNPL payments are still loans. This means customers can still be denied.

Absolutely no payment option is immune to fraud. BNPL, in particular, is attractive to criminals because they can get away with attacks without necessarily having access to data they might need for conventional card fraud. As mentioned above, BNPL fraud is a very real possibility for any merchant interested in the service.

BNPL fees are often higher than average credit card transactions, depending on the financing company.

Lastly, BNPL services may not universally integrate with every POS system or eCommerce gateway. To add BNPL to your checkout options, an upgrade may be required.