Buy Now, Pay Later (BNPL) Will Reduce Abandoned Cart Rates

This post parses the best approaches to reduce abandoned carts with BNPL and allows your online store to thrive with its best revenue potential.

Shopping cart abandonment has become one of the worst nightmares for an e-commerce owner. The worldwide average abandonment rate is more than 70.19 percent, and this figure seems to grow further. The end slide of sales without any conversion—the revenue lost could have greatly benefitted your business.

But what if a way exists to turn this upside down? Well, here’s an option that would lead to a payment solution to reduce abandoned cart rates: Buy Now Pay Later (BNPL) is the actual solution for reducing abandoned carts while driving greater conversion and customer satisfaction.

Let’s learn how to reduce abandoned carts with BNPL, which promises to change your checkout scenario forever.

Understanding the Harms of Shopping Cart Abandonment: An Expensive Problem

A cart abandonment occurs when a customer leaves items in his or her cart but does not finish the purchase. This may sound trivial, but the statistics speak a different language.

Internationally, companies suffer around $4 trillion in loss of revenue annually because of shopping cart abandonment. Of that, $260 billion is potentially recoverable through smarter tactics. For e-commerce brands, this statistic is not just off the wall but a digital wake-up call.

5 Reasons Customers Abandon Their Shopping Carts:

Why are so many of the customers abandoning carts? A number of valid reasons exist, but most boil down to typical frustrations.

1. Unexpected, added costs such as shipping or taxes can really surprise customers at checkout, causing them to leave the website without completing their order.
2. Better deals available on other e-commerce platforms are a major reason.
3. A long, complicated checkout process is another culprit, particularly when users have to fill in endless forms.
4. Some shoppers don’t trust the website’s payment information, while others find the shortage of payment options a deal breaker.
5. Slow shipping times, poor return policies, and website crashes are some of the problems on the list, too.

Lost revenue aside, every abandoned cart potentially translates to lost customer loyalty for online stores. The solution to such issues must be provided; that is where BNPL comes in as a game-changer. If you are running a WooCommerce store, try Payment Plans WC. This is the ultimate WooCommerce Buy Now, Pay Later Plugin to reduce abandoned carts with BNPL.

What is Buy Now, Pay Later (BNPL)?

BNPL is essentially a payment solution that gives customers flexibility. It allows people to purchase things on their own time while also making installment payments for them. BNPL differs greatly from other forms of payment, but the process is still simpler, clearer, and interest-free for short-term plans.

BNPL provides ultimate benefits to these two stakeholders. For consumers, it allows them to make their purchase now and pay later when they are financially stress-free. While, merchants can reduce abandoned carts with BNPL and increase sales.

How BNPL Works?

BNPL works seamlessly at checkout. When customers choose BNPL, they have to pay some of the total amount upfront. The customer agrees to make the remaining payments through installments over a set period of time. Meanwhile, the merchant receives the full amount up front from the BNPL provider. The BNPL Provider bears the risk of collecting future payments.

This payment flexibility is very attractive in today’s economy, where customers look for convenience and affordability. BNPL is a paradigm shift for online shopping.

Pro Tip: Explore the top BNPL trends in 2024 and learn why it’s a proven marketing technique.

Reduce Abandoned Carts with BNPL: The Emergence of BNPL in E-commerce

BNPL has seen highly explosive growth, becoming the payment method millions of online shoppers have chosen in recent years. According to studies, more than 55% of U.S. consumers have used BNPL services; adoption rates rose by 85% yearly.

Source: Exploding Topics-BNPL Stats

For e-commerce merchants, BNPL is no longer a trend but an expectation fulfilled by customers. Today, consumers are not just shoppers but smart ones. They keep an eye on everything from the product’s budget-friendliness to deals across other e-commerce platforms. They are also quick to abandon their carts if the check-out process does not pan out to their needs.

Buy Now Pay Later (BNPL) stands to answer these concerns as an easy-to-use and accessible way of payment.

Reduce Abandoned Carts with BNPL: How BNPL Helps Reduce Abandoned Carts

The biggest BNPL benefit is directly addressing the sources of specific pain points that cause most cart abandonments.

1. More Affordability

One of the paramount reasons for cart abandonment is the high upfront cost. BNPL addresses this by breaking down payments into smaller, more digestible chunks. This makes high-priced items affordable to a broader market, thus lowering psychological hurdles to purchase.

2. Simplified Checkout Process

A complicated checkout process frustrates and drives away sales. After BNPL’s integration into your e-commerce platforms, you are making the payment process simpler and frictionless, driving conversions.

3. Creates Customer Trust

The BNPL service providers Klarna, Afterpay, and Payment Plans WC are highly recognizable brands. Paying for their logos during checkout gives shoppers the trust of security in payment, pushing them towards completing the transaction.

4. Triggers Spontaneous Purchases

BNPL’s flexibility sometimes convinces customers to purchase things they would have waited for. To the merchants, this means less abandonment of carts and a great sales lift.

Reduce Abandoned Carts with BNPL: Advantages of BNPL Offering for Merchants

Now we know how to reduce abandoned carts with BNPL, let’s learn some benefits:

1. Average Order Value (AOV)

Offering customers the golden opportunity to pay in installments increases the likelihood of receiving orders that have higher values. Retailers said BNPL generally raised AOV by 30% or more.

2. It Opens Up to a Wider Market

BNPL attracts cost-sensitive shoppers, including credit card nonusers. Merchants can approach a wider customer base by offering flexible payment options.

3. Payment Assurance at the Point of Sale

While customers pay out over time, the merchant gets full payment upfront from the BNPL provider, which minimizes financial risks.

Reduce Abandoned Carts with BNPL: Challenges Overcome by BNPL Integration

While BNPL offers undeniable advantages, it’s essential for merchants to approach its integration thoughtfully. One challenge is the transaction fee charged by BNPL providers, which ranges from 3-6% of the transaction value. However, with solutions like Payment Plans WC, these costs are minimized, making BNPL a cost-effective choice.

Another factor is the technical integration of BNPL into your e-commerce website. Seamless user experience implies experience and technical know-how.

Finally, the merchant must effectively communicate the value proposition to the customer. Clear messaging about payment terms and schedules without ambiguity must be used in order to build trust and avoid miscommunication.

Reduce Abandoned Carts with BNPL: Best Practices in Adopting BNPL

For merchant adoption, BNPL should be implemented strategically to maximize its potential. Merchants should display BNPL options at the most effective location on the product pages, checkout, or even the home page. Clear communication about the option to “Buy Now Pay Later” in the first experience can maximize AOV.

Example: Include FAQs or tutorials about the BNPL. These educational resources help first-time users understand BNPL better.

Another important aspect is tracking performance metrics. Monitoring indicators such as conversion rates, AOV, and cart abandonment rates will provide key insights into how BNPL actually drives business growth.

Take a Step to Reduce Abandoned Carts with BNPL

Absolutely, your e-commerce venture can never overcome the challenge of shopping cart abandonment. Buy Now, Pay Later, or BNPL solutions can be integrated to make your checkout process even more customer-friendly, with fewer friction points and, ultimately, fewer abandoned carts due to BNPL.

With the Payment Plans for WooCommerce, you have everything you need to turn cart abandoners into loyal customers.

Don’t let the high rates of cart abandonment hinder your business. Learn BNPL and take your e-commerce success to the next level.

Ready to get started? Contact us today, and let your sales take off!