First, it was the credit card. Then, there was layaway. Now, the e-commerce “smarter way to shop” trend that’s sweeping through online retailers is Buy Now, Pay Later (BNPL).
If you’re not familiar with this new way to pay, BNPL programs like Afterpay and Klarna take small retail purchases and divide the payment amount between a handful of installments over time, known as installment loans. There are typically four payments in the cycle to cover the item(s) purchase price over eight weeks, with a payment due every two weeks. However, this timeline and payment structure can vary.
Retailers like Walmart, Amazon, Macy’s, Bloomingdale’s, Best Buy, Target, and many more are now offering some form of BNPL as a purchase option for customers.
While the number of shoppers using BNPL options is far less compared to traditional payment methods like debit and credit cards and cash, that number is growing – especially among younger shoppers, a population that may not have access to or often use credit cards. In fact, research found that 55% of shoppers intended to spend more using a BNPL offer than a traditional payment method.In fact, In November, shoppers spent $8.3 billion using BNPL plans, an increase of 17% over the same period in 2022, according to Adobe Analytics.
The flexible payment plans and ease of purchase get customers the items they need when they need them, saving space for other purchases by freeing up cash and credit lines. Small, delayed payments help customers spend more than they potentially could have using a traditional payment method. Does this sound familiar? It should.
From Buy Now, Pay Later to Financing Offerings
The popularity of BNPL programs closely resembles the structure of a technology financing program, just on a micro level. Like retail shoppers, equipment and software purchasers may be detracted from purchasing the latest equipment because of lack of funds. Using a financing program, your customers can readily access the latest and greatest technology equipment at a fraction of its cash value using a delayed payment structure and have access to additional program benefits like bundled billing.
What’s more, the BNPL method typically has you pay 25% of the item’s price over a short period of time. Financing is just a small percentage of this payment amount and can be spread out over years – not weeks. When you think of it this way, your customers are gaining a piece of equipment that is worth thousands of dollars at a comparable price to their new favorite item they bought with BNPL.
From a new shirt to new software, delayed payment methods are beneficial for customers around the globe. Finding the right financing program can help you secure a bigger and better sale.
Curious how BNPL options work for real customers? See what GreatAmerica customers have to say in this short video.
About GreatAmerica Financial Services Corporation®
GreatAmerica is the largest independent, family-owned national commercial equipment finance company in the U.S. and is dedicated to helping manufacturers, vendors, and dealers be more successful and keep their customers for a lifetime. A $3+ billion company with life-to-date finance originations of $16.1 billion, GreatAmerica was established in Cedar Rapids, Iowa in 1992 and has a staff of over 750 employees with offices in Iowa, Georgia, Minnesota, and Illinois. In addition to financing, GreatAmerica offers innovative non-financial services to help our customers grow. The Connected Technologies Group is dedicated to the IT, Managed Services, and Telecommunications industries. GreatAmerica helps thousands of telecom providers, MSPs and independent VARs evolve their businesses through targeted and innovative solutions. www.greatamerica.com
