As online shopping continues to grow in popularity with no signs of slowing down, many retailers are turning to buy now pay later (BNPL) services to offer their customers more flexible payment options. Two of the most popular BNPL services you’ll have most likely seen during your journeys around the web are Klarna and Clearpay. Both of these services allow shoppers to make purchases and pay for them in instalments over time.
What are the benefits of Buy Now Pay Later services?
One of the primary benefits of offering BNPL services on an e-commerce website is the potential to increase conversion rates. When customers have the option to pay in instalments, they may be more likely to make a purchase than if they had to pay for the entire order upfront. Additionally, BNPL services may help customers to afford larger purchases that they may not be able to pay for all at once, which in turn can lead to increased average order values.
How does Klarna work?
Klarna is a Swedish BNPL service that has quickly gained popularity in the e-commerce space. Klarna allows shoppers to make purchases and pay for them in four interest-free instalments, with payments due every two weeks. Shoppers can also choose to pay for their purchase in full up front or make larger payments over a longer period of time.
According to Klarna’s own data, offering Klarna as a payment option can increase conversion rates by up to 68%. Additionally, Klarna reports that merchants who offer the service see an average increase in order value of 45%.
How does Clearpay work?
Clearpay is a BNPL service that originated in Australia and is now available in several other countries, including the UK and the US. Similar to Klarna, Clearpay allows shoppers to make purchases and pay for them in four interest-free instalments, with payments due every two weeks. Shoppers can also choose to make larger payments over a longer period of time.
While there isn’t as much data available on the impact of Clearpay on conversion rates, some merchants have reported seeing significant increases. For example, UK-based retailer Boohoo reported a 30% increase in conversion rates after implementing Clearpay.
What are some other BNPL services?
While Klarna and Clearpay are two of the most well-known BNPL services, there are several others available to e-commerce retailers. These include Afterpay (the Australian version of Clearpay), Sezzle, and Affirm, among others. Like Klarna and Clearpay, these buy now pay later services allow shoppers to make purchases and pay for them in instalments over time.
While there is limited data available on the impact of these services on conversion rates, it’s clear that BNPL is a trend that is here to stay. As e-commerce retailers continue to offer more flexible payment options, it is likely that conversion rates will continue to increase.
Looking to implement BNPL services to your site?
We can help your business identify and integrate suitable BNPL checkouts into your e-commerce checkout system. Such functionality can be included during the development process of new websites, and in most cases can be retrofitted into existing systems. Why not get in touch with our friendly team of experts today to find out how else we can help.