How ‘Buy Now Pay Later’ Can Increase Sales in WooCommerce?

This article discusses how the Buy Now Pay Later (BNPL) payment option can boost sales in WooCommerce. It explains what is BNPL, its benefits, and how it works. By the end of this article, you will be able to set up Pay later system on your WooCommerce store.

Buy Now Pay Later or BNPL is a popular payment option in eCommerce. It helps shoppers to increase their purchasing power and merchants increase conversions on their store site.

This payment option has gained popularity in eCommerce as it provides shoppers with increased purchasing power, allowing them to make larger purchases without paying the full amount upfront.

If you aren’t aware of the Buy Now Pay Later payment option, let’s begin by addressing it.

What is Buy Now, Pay Later?

Buy Now Pay Later is a payment system that allows customers to purchase their favorite products and pay for them later. The idea of “Buy Now, Pay Later” is simple. Customers make an online purchase and break it up into monthly payments. Similar in concept to credit cards, but without some of the onerous conditions attached to them.

Affirm in the United States, Klarna in Sweden, and Afterpay in Australia are among the largest BNPL businesses. These businesses collaborate with online merchants to offer loans to purchase their products and charge the retailers a fee for the service. Since these collaborations increase sales, retailers frequently welcome them.

International e-commerce software providers like WooCommerce and Shopify now have connectors open with BNPL companies. Linking your online store to BNPL services is rather simple if you match their requirements. Giving your customers a means to pay less upfront for your products while they are on a restricted budget frequently results in greater sales for you, the seller.

How Does Buy Now, Pay Later Work?

Buy now, pay later works by enrolling customers into a contract requiring them to pay back a loan’s principal and interest. You have two options: either do it yourself, which is difficult, or go through a third party, which is the best and easiest option.

Consider the scenario where you connect with a third party like Affirm. If a customer selects the BNPL option, Affirm will refund you the full purchase price and work with the customer to get their money back. BNPL lenders like Affirm often charge between three and five percent of sales as payment for their services.

In order to lend to those most likely to repay the loan, BNPL providers typically perform soft checks on their clients. They take on the loan and fraud risks so you can concentrate on your main business line.

How Can BNPL Help in Boosting Sales?

Now let us see how BNPL can help increase sales on your WooCommerce store.

Price Margin

Every transaction processed by a BNPL service will incur a fee for you as an online retailer; you can balance this fee by raising the standard price of your products.

When selling to BNPL customers, you can mark up the price of your products by a substantial margin because they don’t mind spending more money if they can pay for it over time. For BNPL customers, for instance, you can raise an item’s price from $100 to $110 in your online store.

Use acceptable price hikes in this situation so that your BNPL customers don’t feel taken advantage of.

Convert more visitors into customers

Visitors to your online business are more likely to make a purchase if they can finance their purchases through BNPL services.

According to a survey conducted on behalf of PayPal, 28% of customers between the ages of 18 and 39 are more inclined to return to an online retailer if they provide a BNPL option (based on US customers).

Easy, One-touch checkout

Comparing using credit and debit cards to making payments through BNPL providers, the latter is frequently smooth and simple. They take pride in their one-touch payment system, which eliminates the need to input card information and confirm them with a token or one-time password. Users’ information is already stored in their BNPL accounts, making purchases simple. This aspect boosts sales at internet retailers.

Loans with no interest and easier credit access

In order to attract customers, many BNPL services promote interest-free loans. This sales pitch might seem too good to be true, but there is a catch: instead of charging interest to customers, these BNPL providers generate most of their money through fees charged against store owners.

Furthermore, most, if not all, BNPL service providers highlight the lack of any late fees, prepayment fees, annual fees, or hidden costs. It is comparable to a nicer variation of credit cards that encourage customers to use them for purchases.

By using BNPL, you can draw customers who are hesitant to use traditional credit cards but are receptive to friendlier services. When purchasing online, these clients spend more than the average non-BNPL user.

How to Sse BNPL in WooCommerce?

You can choose from a number of payment plugins to enable BNPL on your WooCommerce store; one such plugin is WooCommerce Stripe Payment Gateway. So long as you satisfy their standards, this WooCommerce payment plugin will enable you to swiftly integrate BNPL services. Affirm, Afterpay, and Klarna are the three most often used choices.

WooCommerce Stripe Payment Gateway

Stripe plugin for WooCommerce

As you might have guessed from the name, only WooCommerce users can use this add-on.WooCommerce is a well-liked and cost-free eCommerce platform for WordPress websites, and the freemium plugin enables these stores to accept payments through the Stripe payment gateway directly on their websites.

With the WooCommerce Stripe Payment Gateway, you can integrate BNPL service providers and other payment methods like Apple Pay, AliPay, Google Pay, and SEPA.

No matter which of the available payment options customers select, this plugin takes care of the rest without any issues. Since the customer never needs to leave your website to complete the payment process, it also guarantees a more seamless buying experience.

The Stripe payment gateway offers an all-inclusive solution for accepting payments from several payment systems on your website.

BNPL options are:

Affirm

The largest BNPL lender in America is Affirm. All sizes of businesses can use it, and customers can spread their payments out over 3, 6, or 12 months. Affirm is used by over 30,000 online merchants, so you’ll be in good company.

The goal of Affirm is to make it easier for customers to acquire the products they want without accruing excessive debt. They often only perform a light draw on applicants’ credit histories, which has no impact on their ratings. Your APR (Annual Percentage Rate) on an Affirm loan may be 0%, 10% to 30%, depending on your credit and eligibility.

Refer to this article to accept payments through Affirm by using WooCommerce Stripe Payment Gateway.

Afterpay

In the US, Australia, and New Zealand, online stores can accept Afterpay. In the UK, Afterpay is also known as Clearpay. It allows customers to divide their payments into four equal installments, each due every two weeks. With over 5 million customers signing up on its network, Afterpay is used by over 60,000 online stores.

The purchase can be divided into four installments with Afterpay. Only the first installment is due from buyers at the time of purchase. Afterpay pays you in full right away and then gradually collects the remaining payments from the buyer.

To know how to configure the payments through Afterpay/Clearpay by using WooCommerce Stripe Payment Gateway – refer to this article.

Klarna

By volume, Klarna is the largest BNPL lender in the world; in 2020, it processed $53 billion in transactions. It enables customers to divide their purchases into 4 or 3 equal payments, each of which is interest-free.

This payment option allows buyers to pay nothing or a small fraction of the total at the moment of purchase, while the store owner receives full payment right away.

Customers who select Klarna at the checkout are directed to the company’s hosted payment page. Buy now, Pay later, financing and installment payments are just a few of the payment alternatives that Klarna provides.

To know how to add Klarna payments by using WooCommerce Stripe Payment Gateway – refer to this article.

BPNL services are also provided by PayPal payment gateway as PayPal credits – Refer to the article to learn more about how to implement the PayPal Pay Later BPNL services in your WooCommerce store using PayPal Express Checkout Payment Gateway.

Also Read: A Guide to eCommerce Mobile Payments

Final Thoughts

Buy now, pay later has grown in acceptance, and, according to the world’s largest payments processor FIS Worldpay, BNPL is anticipated to double by 2024, when it will represent 4.2% of worldwide eCommerce revenues.

To enable Buy now, Pay later on your online store, simply use WooCommerce Stripe Payment Gateway. Select the BNPL service that best suits your needs, then install the extension on your dashboard. It takes little time to set up, and you can start telling people about it right away.

If you don’t offer the option to “buy now, pay later” during the checkout process on your website, we believe you’re missing out on a sizable portion of today’s e-commerce transactions.

Hope you were able to learn something from this article. Also, encourage you to read how to add the Pay now link to your invoices.

If any queries pop into your mind, please jot them down.

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A bibliophile, movie buff, shutterbug, potter head who turned into a writer. Currently writing content for WebToffee.

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