The global pandemic has made mobile transactions with a trajectory of 80% and going to reach $50B in 2021. Due to an increase in sales, this sector continues to projected high in the coming years too. So the industry of e-commerce has seen growth after the surge of Covid.
In recent years, we have seen that consumer buying and selling habits have increased with the huge plunge. Ecommerce industry solutions have offered great flexibility to the customers without any limitation. Under this scenario, buy now pay later is the new trend.
This advantage to the consumer, where they can buy the more expensive item in installments on a monthly to yearly basis. People can easily plan out their point-of-sale loans lending without any worry about the payments under the fixed time.
In aggregation to this, millions of shoppers tied up with BNPL services to give better finance options to the customers and lift their business to a higher degree.
This article makes you more enlightened about the buy now pay later services and its factors, how it works, how it benefits the consumers and the merchants, and features to keep in mind for the development.
- Summary for Quick Glance
- Current BNPL Market stats for 2021-22
- Why are credit cards no longer the captivating solution?
- How does BNPL rise above any other option in the Marketplace?
- What is the Buy Now Pay Later Model, and how does it work?
- Also Read: How to Create a Mobile Payment App That Is Trusted by Experts and Loved by All
- Key Features for the Buy Now Pay Later App
- Also Read: How Much Does It Cost to Develop a Loan Lending App?
- Practices to develop a BNPL App
- How does the BNPL model benefit the retailers?
- BNPL is fortunate for the eCommerce Industries
Summary for Quick Glance
Accessible, no-cost EMIs and transparent; BNPL is the wholesome service heading for the future of a great shopping experience. Few of the companies worldwide and in India are reciprocating their market and services with the BNPL facilities to grant a feasible payment option and a brilliant alternative to credit cards.
Under this blog, we will discuss with you the BNPL services, working, features, and how it eventually will be one of the best options to attract more customers for purchasing an item. This facility has offered to you the repayment tenure, discards the irrespective fuss of credit cards.
So let’s remain with us.
Current BNPL Market stats for 2021-22
- There has been a 45-times growth in the BNPL transactions in the last two years. This has caused many new leaders to get entered into this eye-catching option.
- The global market of the Buy Now Pay Later for E-Commerce is found to be $4.07B in 2020 with a CAGR of 22.4% in the forecast year 2021-28. It acquired 63% of the market share.
- The global BNPL market was found at the price of $90B in 2020, and is soon to be projected at $3.98T in the year 2030 with an annual growth rate of $45.7%.
- After the pandemic, the top BNPL options in the market are Klarna, Paypal’s Pay in 4, Affirm, QuadPay, and AfterPay.
- Countries like Australia, New Zealand, Sweden, Germany, and the UK are the leading game players in the BNPL marketplace. The US is following them afterward. While in Poland, specific products purchase could be done with this option.
- Amazon and Apple partnered with Affirm and Square to buy Afterpay for $29B.
- Amazon joined hands with BharatPe to start this service in India.
- As per the survey, BNPL is becoming popular among the youth between the age of 18 to 24.
- Paypal has the maximum transit with the digital payment behavior transaction on the online services in the last year.
- Afterpay, the New Zealand domestic option has registered 3.4 million active users.
Why are credit cards no longer the captivating solution?
For a long time, we have been benefiting ourselves with our favorite source of credit money. But with the hindrance crew of the information, this option would not be the only option we have. Credit cards have a lot of trouble with interest charges, higher rates of the processing fees, input upfront personal information before any credits, etc. all are the pitfalls.
Coming to the stats, the figures have fallen in recent years with a considerable amount in the credit cards up to 4.1% in 2019.
Here comes the role of the buy now pay later option. It facilitates huge alternatives for the user to pick from. These solutions are adhering with the maximum benefit to the customers with the point of sale loan BNPL, building a strong relationship with them, and escalating them to make purchases.
How does BNPL rise above any other option in the Marketplace?
In the UK market, one out of every three e-commerce brands is likely to move for BNPL options. Why? Simple. Buy now pay later, facilitates the users to pay only a small amount of money or no money at the purchase, and within the appropriate time, users can choose for the payments. Maybe the no-charge products end the traditional credit cards.
The rise in the customer market yields for online payments across the world boosts the market of the BNPL. Slowly and steadily, this model digs its head and footprints to acquire more potential customers.
What is the Buy Now Pay Later Model, and how does it work?
Buy-Now-Pay-Later, as the name implies, is the solution that confronts the users to buy anything within a single roof without any worry of the price. How could it be possible? Have you ever wondered?
Yes, this factual model, begins the rise in the no-fee purchase or pay in small installments. This is the phase we all move towards the automated solutions for the payments with our comforts. Yes, technology brings us to a place where everything could be possible- just a tap is all we need. Hire app developers to develop digital wallet app development services.
Let’s understand the working of the model with the best BNPL app present today; Klarna.
Klarna gives its user the option to choose from any of the products, add to buy, and forget to pay. Yes, you heard it right. This is how the model works.
- Klarna offers you a 30 days option for easy tussle-free payments.
- Another option; can go for paying with the small installments options (max 3-4).
- Add your card to the payment option, easily money gets transacted to the platform, without any first-time fees.
- For every unique transaction, the merchant gets paid 2-6% of the commission plus the fixed fee/ transaction.
- However, if you want to choose the installments option more than the limit, make it financially. Through this, you can avail of the installment limit of 36 months.
- Online retailers and traditional brick-and-mortar retailers use this model for their business.
- Customers can pay by scanning QR codes.
Key Features for the Buy Now Pay Later App
Instant Sign-up Process
At the time when a user comes to the platform, make sure that he would have to wait for a long time. The quick sign-up procedure makes everything speedy for him. A fast loan procurement process would be much delighted by the users and help you to grow. Users find themselves in trouble if they engage in the KYC steps.
Quick Payment Methods
To surpass faster payments, you should provide multiple options to the customers. Bank transfers, debit or credit cards, or UPI methods could be more convenient for the consumers.
Transparent and Low-Cost Pricing Model
BNPL payment method offers small fees for the overpayment process that is performed at the user end after the purchase of the product.
Using the BNPL service, the whole amount is broken down into easy installments without any charge up to 3-4 installments. While for the large installment time, BNPL charges a small number of fees.
Depending upon the type of BNPL service provider, they offer loans on a weekly or monthly basis, while some have extended it for a yearly basis.
QR Scanning for the payments
This aids the customers to pay without any swipe of the card.
Practices to develop a BNPL App
Implement the right solution
Who is your target audience, this is the first perspective you need to consider. Keenly understand the market and any gaps, then implement where you are lacking. Why customers are going through the early abandonment of carts and how you can serve them well.
Research on the minute details, how much time customers will take to buy the product.
SDLC life cycle
This is the next important step for the development of the app. The best model will lay down your app productivity to another level. SDLC life cycle is the right methodology for your business.
Best API implementation is very important to integrate within the app. BNPL is a very fusion prof model derived from the list of APIs like PaaS & SDKs in your project.
Offer omnichannel experience to customers
The omnichannel method has integrated multiple payment methods for the customers to give a great customer experience. Merchants can give NFC-enabled terminals for customers’ quick payments.
Pinpoint the essential customer convenience
Once you have identified the needs of customer experience, it’s easy for you to break out the stages into different development phases. Choose unique models for every requirement of the product. Establish an MVP for redefining the initial structure of the app. Take feedback in return from the customers.
Develop the app
Development of the BNPL app can be done with several factors. You can hire the outsource company in case you have any financial limits, or hire a freelancer who has enough experience with the technologies required for the development or you can take the help of your in-house team.
Everything depends on the cost and the time. Whatever way might be superlative for you, go with that.
Testing may raise the final cost of the mobile app development. Prevails testing at the various levels to ensure the maximum quality and productivity of the app.
If your app could not match with the high level of protection, it could be a waste of time. Try to add as much layer of security, make it unbreakable for the hacker to break it.
Set data encryption to avoid any failure at the end of the product build.
Take care of the Payment regulations
Online and secured transactions are a very crucial part of the app. The government has different rules and regulations in finance to improve the security alliance in the existing market. To hire mobile app developers must recheck twice that the data is placed properly under the set policies.
Go after abandoned carts
It’s not a great way to discard the customer’s choices after their purchases. After the successful development of the app, it is always a good way to engage your customers on your platform. Open your feedback channel, fetch them a scheduled weekly mail to validate your presence after the purchase.
List the store on the BNPL platform
For the retailer, place your store in the BNPL directories to get a large amount of traffic from the existing resources.
How does the BNPL model benefit the retailers?
Over the years, customers limit their purchases for many reasons. They have credit cards with high-interest rates, pulling them back for any transaction. But with the BNPL, the market has seen a positive impact on the conversion rates.
This option encourages 20-30% of the buying customers.
Better Customer experience
In the highly competitive environment nearby, customers have a high sense of options to look into, while businesses can’t stick onto outdated solutions to lure the people. To maintain the potency of customers on the platform, add some rewards or coupons, discounts, and another scheme to your app.
Have strong customer loyalty
Customers don’t want to dig into the vicious circle of buying and returning things. They get themselves irritated once they have found the platform complex for returns.
Customers are likely to return their purchases when they find strict return policies. However, the cost sinking affects the gain, but it is one of the essential tools for the driving business.
High lifetime value for the customers
The customer value is driven by the fact that how many customers it attracts. The more options you provide to the customer, henceforth the more trust they show to you.
BNPL is fortunate for the eCommerce Industries
Bigcommerce adopted Klarna’s BNPL option to execute their belongings. Stormy Kromer and Revelry – big brands bring to their customers the BNPL option.
Klarna, a leading online store, offers shops now pay later and you can split your payments up to 4 interest-free installments from any device, so you have a choice to buy your choice of things and pay later.
This brand consists of a wide variety of well-curated options for the user to look from. You can pick any of the products from the collection, whether it belongs to fashion, beauty, or gadgets.
You may track your orders, save your exclusive money, find the deal, and tap to get the maximum discounts. So wait, not anymore, go get your BNPL option to crave anything.
Slowly and steadily, the e-commerce market has seen a whopping figure towards online shopping, and this motivates new developers to come up with great mobile solutions and experiences.
Most companies are looking for a mobile application development company to offer BNPL solutions to the market. Why? The reasons are simple, BNPL is a convenient and fast way to serve instant loans to consumers. If you too are planning to have your app that has to follow transparent security alliances, rules and regulations, and most important conventions for the users, you should hire a skilled team that fits all of the terminologies.