If you are an e-commerce website owner, pay later payment gateways may be your next best investment.
These solutions give customers the ability to pay for their purchase at a later date. This can be extremely beneficial because it gives buyers the opportunity to pay for what they want without having to worry about it now.
56% of customers want to see multiple payment options [No Cart Left Behind (columnfivemedia.com)] at checkout. Since cart abandonment is a key issue for ecommerce, keeping customers happy at the point of decision is a big deal.
Buy now, pay later is a brilliant option to make available to people while they are shopping, especially if your items are on the expensive side.
What are the Advantages of Buy Now, Pay Later Solution?
You have a great product or service to sell. You know it will increase your business, but you’re not sure how to get the money up-front from customers. You’ve heard of buy now, pay later solutions which allow consumers time to make their purchase decision and still pay for the item in full at a later date.
This is an excellent option for ecommerce store owners who are looking for ways to boost their sales volume without taking on more risk.
Here’s why a WooCommerce payment gateway that allows customers to set up a payment plan will work for your business.
Buyers love to choose from payment opportunities
Customers love choices. When a WooCommerce merchant offers more choices for payments, the customer feels empowered and their shopping cart doesn’t get abandoned. The result is customers spend more money.
56% of customers expect and want more options when they reach the payment gateway. They expect to pay with a credit card, debit card, and now with a payment plan.
Providing choices will encourage repeat customers. It will also reduce the friction and tension customers experience during checkout.
Imagine this: you see an app you want to add to your mobile phone. It costs just $0.99. To buy it, you must count out $0.99 in change from your pocket and pay someone. During the counting, you might change your mind and decide that silly game isn’t worth the price.
That’s the point. Offering a payment plan as a payment method is more convenient for the customer and also feels more affordable.
More sales because of an increased conversion rate
Klarna, one of the top providers of pay later payment options, sees an increase of 20% [Offer financing to your customers | Klarna US] in their merchant conversion rates. This goes along with an increase of 60% in average order value.
When people choose their products and then arrive at the cart page, the last thing you want to give them is a reason not to make a purchase. Instead, show them an affordable payment plan and the orders will flow in.
Your Business Gets Marketing Exposure
Buy now, pay later (BNPL) providers maintain directories of every merchant that uses their service. Your business could benefit from this bit of marketing exposure.
Karna features more than 2,800 different shops on their website, and Clearpay boasts more than 3,5000 shops that accept their payment method.
Afterpay is the WooCommerce plugin for offering payment plans to customers through Clearpay. Clearpay launched in 2015 and quickly grew to tens of thousands of business partners.
You can add the WooCommerce plugin to your site, set up a Clearpay account and be up and running very quickly. Customers will be able to make payments and will not be charged any interest if they pay on time.
How much does it cost?
They don’t advertise their fees, but the Woocommerce plugin is free. Business insiders estimate the fees to be 3-6% of the total sale amount.
Affirm offers tailored monthly payment plans to allow users to buy what they love. Increased conversion rates happen because more shoppers are buying things and they often buy more than the typical customer. Affirm also has a great marketing team that works with over 6,000 U.S. merchants and over 5 million people in their network to help your business reach new potential customers.
Affirm’s own statistics claim they improve ecommerce businesses:
85% higher Average Order Value when shoppers use Affirm
20% repeat purchase rate with Affirm as an option
For your business, Affirm works similarly to the other BNPL solutions. Affirm sends you payment in full and then bills the customer for the duration of their agreed payment plan.
One of Affirm’s selling point is their higher approval rate. They approve 20% more customers than their competitors. This means more people buying your products!
How much does it cost?
Affirm typically charges 5.99% + $0.30 per transaction. This might vary a little by industry. There are no other charges for using the service.
Klarna is Europe’s largest bank and offers payment solutions for 90 million consumers. They offer a variety of payment options including direct payments, pay-after delivery, and installment plans that let you pay when and how you prefer to online.
The payment options available to your customers are:
Buy Now, Pay Later – Payment in full deferred by 14-30 days.
Buy Now, Pay Later in Instalments – payment made over a number of months
Slice It – pay later in long-term monthly payments
Pay Now – direct payments for all items
How much does it cost?
Klarna’s normal payment fees range from 3.29% – 5.99% plus $0.30 for each transaction. Some of their specific products, such as Instant Shopping, also have a $30 monthly fee.
Credit Line differs from the other buy now, pay later solutions because it works like a traditional line of credit.
Here’s a quick overview:
Customer applies for a line of credit
If approved, the customer receives a monthly billing date and payment date.
They can shop on your website and purchase things with the credits they have been approved to use.
On their billing date, Credit Line will generate a bill and send it for payment.
once the bill is paid, the credits will be recycled back into the customer’s available credits.
Many businesses operate with a line of credit. B2B, or ‘trade,’ businesses often use this kind of accounting. This makes Credit Line for WooCommerce a great solution for ecommerce owners selling to customers who want a monthly account for their purchases.
How much does it cost?
$49 per year for the WooCommerce plugin.
These buy now, pay later solutions for WooCommerce will help you generate more revenue by increasing your average order value and your conversion rates. Offering options at the checkout makes the final purchase decision even easier for your customers. Their seamless user experience translates directly to more sales for your store.
If you want help configuring your payment gateway to accept orders with deferred payment, get in touch. An expert member of our team will be happy to help you.
Are You Looking for a WooCommerce Pay Later Expert Who Can Help Take Your Ecommerce Site to the Next Level?
Dave’s role at TheeDigital is to help our clients meet their goals by creating websites that outperform their competition. Dave is a student of life and strives to continue learning the latest trends in the industry.
Having spent many years in the digital media world working in the television and newspaper industry as a graphic designer & design manager, these skills definitely benefit our TheeDigital clients.