Once upon a time, if you wanted something but didn't have the money to pay for it right away, your only real choice was to get a loan or pay for it over time. Both options aren't very good because you have to pay interest on them. Consumers who can't or don't want to use a credit card to pay sometimes have no choice but to not finish a transaction.
"Buy now, pay later" (BNPL) agreements let customers buy things online quickly and pay for them over time. Online shops often offer BNPL models as an alternative to credit card payments because they help increase sales and keep customers coming back.
Retailers often work with a group from outside their company to carry out BNPL projects. The third-party company will pay the seller the full amount of the transaction, protecting the retailer. Depending on the terms of the agreement, the third party may get interested, but most of the time they charge a one-time transaction fee of 2–8% to cover their own risk.
Customers are used to using different kinds of cards to pay for things. But their economic situation has gotten worse, and inflation is at its highest level in four decades. McKinsey says that only about a third of the people they asked are happy with their finances and that more than half of them are afraid of losing their jobs. Even if people treat themselves sometimes, they are still trying to save money.
To treat a customer well, you need to give them the right tools at the right price and give them great customer service. If you do this, you might be able to keep that customer for the rest of your life. Like any other business strategy, BNPL models are not a surefire way to make customers happy. But they are a legitimate way for businesses to build the long-term relationships they want.
Customers still want to buy, and they will if they can find good payment plans that don't add to their debt. This is true even if inflation keeps causing big problems for the economy. Because of the way, the economy is right now, more and more customers are looking for ways to pay later. This could be a good time to use BNPL models in your approach.
If you work in the FMCG industry or sell goods that are used by a lot of people, you could use BNPL to help with your embedded sales strategy. This not only boosts sales but also leaves room for future outright sales from customers who don't want to use BNPL.
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