What would your reaction be if we told you there is an easy way to boost your WooCommerce sales instantly? You would be eager to know that, wouldn’t you?
If you are still curious, then the name of this secret strategy is BNPL (Buy Now, Pay Later)!
Based on a study conducted by Bain & Company, 57% of merchants who implemented BNPL have experienced high checkout conversions.
This article will explain BNPL (Buy Now, Pay Later), how it works, and why you should implement it on your WooCommerce store. We will also show you how the Payments Plan for WooCommerce extension makes integrating BNPL into your WooCommcer checkout easy.
So without further ado, let’s get started!
What is BNPL (Buy Now, Pay Later)?
BNPL, or Buy Now, Pay Later, is a payment option that lets customers buy products or services instantly online and pay for them later in fixed installments over a specific period of time.
Let’s understand it with an example: A customer who buys a $300 product using the BNPL payment option can take possession of the product immediately but is liable to pay for it in four installments of $100 every month for three months or $25 for the next twelve months.
BNPL is similar to layaway or lay-by but with some key differences. With layaway, customers must pay a deposit and make regular payments until they pay off the total amount before receiving the product. As we explained in the examples with BNPL, customers can receive the product immediately after placing the order and pay for it later.
Moreover, BNPL differs from credit cards or loans because it does not require a credit check or charge interest or fees (in most cases). Customers can use their debit card or bank account to make payments and avoid getting into debt.
How Does a BNPL (Buy Now, Pay Later) Service Work
To provide BNPL on your WooCommerce store, you need to integrate a BNPL service provider using a WooCommerce extension like Payment Plans for WooCommerce, which will handle the payment processing and customer service for you. Many BNPL service providers, such as PayPal, Klarna, Stripe, Square, and Authorize.net, are on the market today.
Each BNPL service provider has its terms and conditions, such as the number of installments, repayment period, interest rate (if any), fees (if any), eligibility criteria, approval process, etc.
Generally, the process of using a BNPL service on a WooCommerce store goes like this:
- First, you use an extension or an API to sign up with a BNPL service provider and integrate it with your WooCommerce store.
- You display the BNPL option on your product and checkout pages using promotional messages or widgets provided by the BNPL service provider.
- Customers who want to use BNPL select it as their payment option at checkout and provide their personal and payment details.
- The BNPL service provider quickly verifies and approves or declines the customer’s request.
- If approved, the customer confirms the order and receives an email with the payment schedule and instructions.
- The BNPL service provider pays you the full order amount upfront (minus any transaction fees) and takes on the risk of non-payment.
- The customer receives the product or service immediately and pays the BNPL service provider in installments according to the agreed terms.
As you can see, offering BNPL on your WooCommerce store is a win-win for both the customer and the store owner.
7 Key Reasons to Offer BNPL (Buy Now, Pay Later) Service for Better Sales
Buy Now and Pay Later have emerged as rapidly growing payment options, especially among millennials and Gen Z.
According to a report by Worldpay, BNPL transactions will account for 9% of global e-commerce sales by 2024, growing by 181% between 2020 and 2024.
Now that we have covered the basics. Let’s jump into the exciting part – the seven key reasons why offering BNPL can supercharge your WooCommerce sales.
#1: Boost Average Order Value (AOV)
The incorporation of BNPL can yield a substantial increase in your Average Order Value (AOV). Customers are more likely to add extra items to their cart when they can pay in installments. The psychology behind this is simple – customers perceive a smaller financial burden when the cost spreads over time, leading them to make larger purchases.
A study by PayPal shows that merchants who offered PayPal’s Pay in 4 payment option saw an average increase of 56% in AOV compared to other payment methods.
To easily incorporate the Paypal BNPL payment option into your WooCommerce, you can use Payment Plans for the WooCommerce extension.
#2: Lower Cart Abandonment Rate
Cart abandonment poses a prevalent challenge for online stores, leading to potential loss of sales and revenue. One of the main reasons customers abandon their carts is because they are not satisfied with the available payment options or find them too expensive or complicated. Customers may also change their minds about buying something if they have to pay the full amount upfront.
By offering BNPL, you can reduce cart abandonment by providing customers with a convenient and affordable payment option that is convenient and affordable. With BNPL, customers can avoid paying high-interest rates and avoid making large one-time payments, leading to reduce cart abandonment rates significantly.
#3: Higher Purchase Frequency
Purchase frequency indicates the frequency at which customers make purchases from your store, and it plays a significant role in determining your customer lifetime value (CLV). In other words, it’s all about how much a customer spends on your store over their entire relationship.
Customers who find your payment option more convenient and affordable are more likely to return to your store and make additional purchases. Consequently, this leads to higher purchase frequency with more happy customers, ultimately increasing your WooCommerce sales.
#4: Greater Customer Satisfaction
As the old saying goes, “Happy Customers, Happy Business!” Customer satisfaction is the heart and soul of any successful business.
According to a survey conducted by Bain & Company, 38% of merchants reported an increase in customer satisfaction after integrating BNPL into their checkout process.
With BNPL, you give your customers the freedom and control they crave. They appreciate the financial flexibility and convenience that comes with paying in installments. By prioritizing their satisfaction, you create a positive shopping experience that leads to customer loyalty and repeat purchases.
#5: Attract More Customers
The easiest way to offset customer churn is to acquire new customers regularly, and when it comes to attracting more customers to your WooCommerce store, offering Buy Now, Pay Later (BNPL) can do wonders. One reason for this is easy monthly installments (EMIs). Breaking down the full payment into manageable chunks makes it more affordable and appealing to potential customers.
Additionally, BNPL leverages word-of-mouth marketing. When customers get an enjoyable experience shopping with you, they’re more likely to recommend your store to their friends and family. This organic promotion can significantly expand your customer base and bring in new sales opportunities.
#6: Competitive Advantage
In a competitive marketplace, value addition is all you need to stand out, and BNPL gives you that competitive edge. You can stand out by offering something extra that adds value to your customers. This way, you can show your customers that you care about them and want to make their shopping experience easier and more enjoyable.
Moreover, it positions your brand as modern, customer-centric, and in tune with evolving consumer preferences, ultimately attracting more customers and gaining an advantage.
#7: Good for Your Brand
Your brand’s reputation matters and BNPL can make it better. By offering a flexible payment solution like BNPL, you convey that you are a modern and innovative brand that keeps up with the latest trends and technologies in e-commerce.
Moreover, partnering with BNPL service providers that support sustainability or charity initiatives is a good idea. This positive association can do wonders for your brand image and help you build trust and loyalty among your target audience.
Dealing with technicalities and complex integration process prevents many merchants from using BNPL. But there is good news! The Payments Plan for WooCommerce makes it so easy that a novice can do it. All you need is to install the Payments Plan for WooCommerce extension, connect your BNPL service provider, then enable the BNPL payment option on your products and checkout pages, and you are good to go.
With Payments Plan for WooCommerce, you can:
- Create unlimited BNPL plans with custom terms and conditions
- Set the number of installments, the payment frequency, the interest rate, and the fees for each plan
- Easily integrate more than 30 payment gateways
- Display the BNPL option on your product and checkout pages with dynamic messages.
- You can send renewal notifications automatically, notifying your customers when a payment is due, and much more.
So, what are you waiting for? Get the Payments Plan for the WooCommerce extension today and boost your WooCommerce sales with BNPL!
Incorporating BNPL into your WooCommerce platform can be a game-changer for your business. By offering BNPL, you can provide your customers with a convenient and flexible way to pay for their purchases while reaping many benefits, from boosting average order value to attracting new customers and improving your brand image.
Remember, the key to successful BNPL integration is choosing a reliable WooCommerce extension that offers a comprehensive solution, and the Payments Plan for WooCommerce offers it all!
So, Get the Payments Plan for WooCommerce now and revolutionize your sales strategy with Buy Now, Pay Later, and witness the transformative impact it can have on your WooCommerce business.
Frequently Asked Questions
What problems does BNPL solve?
BNPL solves several problems for both customers and businesses. In the case of customers, it offers financial flexibility by allowing them to make purchases without paying the full amount upfront, which alleviates budget constraints. On the other hand, BNPL helps businesses reduce cart abandonment rates, increase average order values, attract new customers, and enhance customer satisfaction.
Why is buy now, pay later good for business?
Buy Now, Pay Later benefits businesses by providing a competitive edge in the market. By offering BNPL, businesses can attract more customers, increase sales, and improve customer loyalty. It also helps businesses overcome common obstacles, such as high cart abandonment rates, limited payment options, etc.