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. These services have taken the ecommerce world by storm, allowing shoppers to make purchases and pay for them in instalments over time.
But why exactly are BNPL services gaining such popularity and what are the advantages of integrating them into your ecommerce strategy? In this blog, we take a deeper dive into the growing trend of Buy Now Pay Later services, including their benefits, and some of the most popular providers to consider adding to your checkout.
What is Buy Now Pay Later in the UK?
Buy Now Pay Later in the UK is a type of short-term financing that allows users to purchase items and spread the cost of their payments, or pay in full at a later date – usually with no interest or fees. It provides customers a flexible alternative to traditional credit cards or store finance.
BNPL is a win-win situation for both consumers and retailers, as shoppers can spread out the cost of their purchases and make them more manageable, while businesses can attract more customers by offering convenient payment options.
Why are Buy Now Pay Later services so popular?
The popularity of BNPL services in the UK has surged thanks to their simplicity, convenience, and alignments of modern consumer habits. In a digital-first economy where instant gratification meets financial awareness, BNPL offers the best of both worlds – enabling shoppers to get what they want now, while spreading the cost over time without interest in most cases.
And because they allow consumers to make purchases and break down payments into smaller, more manageable installments, it’s especially appealing for those on a budget and those looking to spread their expenses over time, like younger consumers such as Millennials and Gen Z for example.
As we’ve previously mentioned, BNPL services provide a practical solution for those who want flexibility without having to rely on traditional credit cards, especially in today’s current economic climate. And for retailers, these services help reduce their cart abandonment and boost average order value simply by offering these payment options at checkout.
What are the benefits of Buy Now Pay Later services for ecommerce businesses?
Incorporating BNPL services as part of your ecommerce strategy and offering a variety of payment options on your checkout page can bring a wide range of benefits including:
- Increased conversion rates – you’ll reduce friction at checkout by removing the need for immediate full payment, helping to turn more users into paying customers.
- Higher average order value – offering flexible payment options like BNPL often encourages shoppers to spend more and opt for higher-priced products, increasing your average order value.
- Reduced cart abandonment – unexpected costs are one of the biggest reasons shoppers abandon their carts. BNPL options give customers confidence to complete their orders without feeling overwhelmed by the total cost upfront.
- Enhanced customer loyalty – customers appreciate flexible, interest-free financing options and are more likely to return to brands that offer BNPL services, building long-term loyalty and encouraging repeat purchases.
- Broader customer reach – BNPL often appeals to a wider demographic and by offering these payment options, you can tap into a growing market of budget-conscious shoppers and younger consumers.
- Competitive advantage – offering BNPL can help ecommerce businesses stay competitive. Brands that fail to offer flexible payment options risk falling behind more forward-thinking competitors.
- No additional risk for retailers – BNPL providers typically take on the credit and fraud risk, meaning online retailers will still receive full payment upfront.
With a huge array of benefits like the above, it’s easy to see why so many ecommerce businesses offer Buy Now Pay Later services for their customers.
What are some of the most popular BNPL providers?
There are several well-known Buy Now Pay Later providers to consider adding to your checkout, each offering slightly different features to suit a range of shopper preferences. Some of the most popular brands include:
- Klarna – one of the most recognisable names and partners to thousands of UK retailers, Klarna allows customers to split payments over three interest-free instalments or pay up to 30 days later.
- Clearpay – another major player, Clearpay is popular due to its simple four-instalment payment plan with no interest.
- PayPal Pay in 3 – a great option if you already offer PayPal as a payment option, PayPal Pay in 3 allows existing PayPal customers to divide purchases into three interest-free monthly payments.
- Zilch – not only does Zilch offer different payment instalment options to consumers, they also offer an opportunity to build and pay in rewards.
In addition to the above BNPL providers, there are several other options available to ecommerce retailers, such as Sezzle and Affirm, that allow users to make purchases and pay for them in instalments over time.
Looking to implement BNPL options to your site?
Buy Now Pay Later in the UK is a market that is experiencing exceptional growth and that has been primarily driven by consumer demand for flexible payment options. In a highly competitive ecommerce landscape, integrating BNPL payment options enables your business to stay ahead of the curve and provide a win-win solution for you and your customers.
If you’re looking to add BNPL to your site, get in touch with us today. We can help your business identify and integrate suitable BNPL payment options into your ecommerce checkout system, which can either be included during the development of a new website, or can be retrofitted into existing systems.
