If you’re like many other digital commerce merchants, the best part of the shopping experience takes place when a client clicks that “buy” button and becomes a (hopefully) loyal customer.
One way to boost these website conversions for your business is to give clients the opportunity to pay later—as in Buy Now, Pay Later (BNPL).
Notably, offering a BNPL option to your clients may increase digital commerce conversion rates by 20-30%, according to a RBC Capital report. Shoppers have really embraced this type of flexible payment so much that the total BNPL sales volume last year surged around 41% during the last year, and it’s set to double by 2024.
Here’s why, according to Affirm (NASDAQ:AFRM), offering a pay later option to shoppers on your website may help convert more of them into regular customers:
- Buy now, pay later helps ease ‘sticker shock’ at checkout – Many shoppers abandon their carts once they see the total purchase price, because it often includes added charges like tax and shipping costs (the top reason for cart abandonment). But seeing a BNPL option can relieve the pressure of having to pay the total price immediately, and this can help shoppers fit the purchase into their budget.
- Offering a pay-over-time option like Affirm to shoppers can also pull sales forward, resulting in incremental e-commerce conversion and revenue gains. In a recent study of Affirm users, 29% said they would not have completed the purchase if Affirm wasn’t available. And nearly half (45%) would have delayed the purchase.
- Buy now, pay later is becoming a common payment method – In recent years more and more shoppers have used BNPL options as a way to buy what they want while managing their personal cash flow. A C+R Research study in April 2021 found that 60% of shoppers had used a BNPL service in the last year.
- Once they’ve made a purchase and paid for it over time, many shoppers are inclined to buy this way again. In fact, a recent survey found that 3 out of 4 Americans who made a BNPL purchase for the first time during the pandemic said they’ll continue to make similar purchases after the pandemic is over. Giving customers options at checkout ultimately helps increase your website conversions now and in the future.
- Many shoppers expect a BNPL option at checkout– Some shoppers prefer BNPL so much that it factors into their decision of where to shop. A recent Affirm survey found that just about half (49%) of shoppers will only buy from retailers that offer a BNPL option.
Silvija Martincevic, Affirm’s Chief Commercial Officer, stated:
“Our latest Consumer Spend Report shows nearly half of consumers will only complete a purchase if a merchant offers a pay-over-time option at checkout. This shows how important it is for retailers to offer customers payment flexibility that will not only increase conversion rates, but will also help to bring those customers back.”
For more details on this update, check here.