BNPL payments are expected to account for almost a quarter of global eCommerce transactions by 2026.
Our eCommerce specialists at iocea are here to explain just how important it is for you to offer BNPL to your customers!
BNPL stands for ‘Buy Now, Pay Later’, which is a popular payment mode which allows customers to shop online and place an order but pay later. These services allow customers to buy on credit and usually offer 0% interest, which is hugely appealing to anyone wishing to make purchases before payday, during a period of reduced income, or if they do not own a credit card.
There are, however, often fees or interest charged for late payment, so it is crucial for users to check out the Terms and Conditions of any BNPL service before going ahead with the transaction.
There are a variety of BNPL services operating in the UK and globally, but the current market leaders include:
It’s forecasted that 65% of merchants plan to add buy now, pay later as a payment method in 2022!
We’ve seen what can happen to businesses that fail to keep up with changing consumer demands and online shopping trends. So, don’t fall behind your competitors. Ensure that you’re catering to your customer’s needs and maximising your conversion rate by offering a diverse range of payment options.
If you’ve still not added BNPL to your checkout, then you’re sure to put it at the top of your to-do list after reading these fascinating statistics:
BNPL payments are expected to account for roughly 24% of all global eCommerce transactions by 2026 (Juniper Research, 2022) – Okay, so this is HUGE. Almost 25% of eCommerce transactions are expected to be made using BNPL, so if you’re not offering the service, then you’re missing out on almost a quarter of the market.
Maximise your sales potential by adding at least one BNPL provider to your checkout; but the more you offer, the better. This is because customers may have a preferred provider and this will help them keep their debts due to a single provider, rather than spreading them across several providers and making re-payments complicated.
In 2021, 55.8% of consumers used a BNPL service (The Ascent, 2021) – Over half of consumers used BNPL last year, which speaks for itself about just how large the market is, and how high in demand the service is. It’s important that you cater to these consumers by providing a payment option that works for them.
9.5 million Brits said they avoided buying from retailers that don’t offer BNPL services (Finder, 2020) – Of all of the data found online, this might be the thing that stands out most.
This really highlights the growing importance of offering BNPL to customers, showing how important it is to stay up to date, as customers will simply shop elsewhere if their needs aren’t being met.
BNPL’s user base grew 85% in 15 months in 2020 and 2021 (PYMNTS, 2021) – The popularity of BNPL just keeps growing, and there are no signs of it slowing down either. With this payment method accelerating in demand, it’s vital for you to keep up. Ensure that you partner with a BNPL provider sooner, rather than later!
BNPL can boost eCommerce sales by up to 30%! (Finder, 2020) – Sales are boosted for a number of reasons, one of which is that customers who may not have previously been able to purchase due to lack of funds, are now able to.
Secondly, as using BNPL doesn’t require the customer to pay immediately; they may feel more comfortable making a higher value purchase, as re-payments can be spread out over time.
So, the value of their basket may be significantly higher than if they were to pay outright or have to pay interest on a credit card.
Finder (2020) reported that 37% of Brits saying they have used Buy Now, Pay Later, but what does the market for BNPL services look like? Who are the people using BNPL?
There are a number of reasons that eCommerce customers are using Buy Now, Pay Later services, and BNPL offers a solution for various problems. Research has found 6 major motivations for using Buy Now, Pay Later, and these were:
Klarna is the most popular BNPL provider of choice in the UK. They offer some of the most flexible repayment terms available, allowing users to pay instalments every two weeks, over 6 to 36 months.
Not only this, but Klarna is interest-free and does not charge users any late payment fees, so it’s easy to see why Klarna is so attractive for UK shoppers.
In terms of app downloads, Finder reported that Klarna was the most downloaded, gaining 986,000 downloads in the UK between January 2020 and July 2020, compared with 435,000 downloads of My Argos Card, 298,000 of Clearpay, 162,000 of Laybuy and 44,000 of Openpay.
And more recently in January 2022, Klarna reported that their customer base had grown by 40% to over 16 million UK consumers, over the past 12 months. They also announced that they are partnered with over 18,000 retailers!
iocea eCommerce Solutions are partnered with Klarna and Openpay, which means that our website developers are able to easily add these BNPL payment options onto your website and checkout. We also offer PayPal Credit which is another popular choice with customers, and we can integrate any other BNPL providers that you wish to offer.
As we have explained throughout this article, there are a wide variety of reasons that your business should offer a Buy Now, Pay Later option at checkout. Including meeting growing customer demands, gaining a competitive advantage, maximising sales potential and increasing customer loyalty.
Every day that goes by that you’re not offering BNPL, is a day that your competitors have a chance to gain an advantage over you, so don’t delay! Get BNPL added to your eCommerce website today, with the help of iocea.