Benefits of Pay Later Purchases for Ecommerce Websites
With the new wave of Pay Later options, including big players Klarna and Clearpay, there are now almost zero financial risks for either the customer or your online business when making a purchase. This might sound too good to be true, however we’re going to explain how this works along with a host of other enticing benefits of Pay Later purchases for ecommerce websites.
What’s in it for the customer?
If you can’t persuade customers to use your shiny new Pay Later checkout options then there’s no benefit for your business at all. So, we’re going to start by explaining why more and more online shoppers are choosing to use Pay Later apps such as Klarna and Clearpay.
- Flexible payment options Knowing that they can split the cost of a purchase with interest-free installments, gives customers more freedom to spend without breaking the bank.
- Customers can return items without being charged If a customer orders a tonne of items and decides they only want to keep half of them, they are able to do this and will only be charged for the products they keep. Once again this gives the customer more control, and being able to return items without any fuss should encourage more spending. As we are in a returns culture, this is a particularly alluring benefit of Pay Later purchases.
- No financial risk for customers If an item doesn’t turn up, the customer simply contacts the Pay Later app provider and their account won’t be charged. This ability for Pay Later apps to act as mediators between businesses and customers is extremely enticing for both parties as it removes a great deal of hassle and risk. You don’t deal with the customer, the app provider does. Disclaimer: Pay Later purchases are only risk-free for customers up to a point. If payments are not made on time, interest will be charged. But if customers are sensible and only buy what they can realistically afford then there shouldn’t be any issues.
What are the benefits for your ecommerce business?
- No financial risk for your business
Pay Later apps like Klarna pose no financial risk for ecommerce businesses. But how? As soon as a purchase is made using the Pay Later app, your business will receive the funds in full – no lengthy waiting periods and no cash flow issues. Soft credit checks are performed on customers to make sure they are responsible spenders and likely to follow through with their payments. Essentially, if a customer doesn’t pay in full, that’s not your problem. It’s as simple and refreshing as that.
- Attract more customers and higher value baskets
There are lots of consumers out there that have to budget and monitor their monthly expenditure like a hawk, and whilst they may really want that gorgeous piece of furniture for their home or the latest designer shoes, sometimes the monthly budget just doesn’t stretch far enough to justify such a purchase. Essentially, allowing purchases to be split across interest-free installments gives customers the buying power which they may not otherwise have access to – and this is great news for your business. Ultimately, it should open-up a wider customer base and encourage higher basket values.
What’s the catch?
Some Pay Later providers will charge businesses a certain percentage of each transaction. However, with all the benefits that come with these purchase options, an increasing number of ecommerce businesses feel it’s more than worth it.
Should I install Pay Later apps on my ecommerce website?
Easy to install, risk-free, and opportunities to open up a wider customer base whilst encouraging higher value basket spend – with all these benefits the question should be why wouldn’t you want to install a Pay Later app onto your ecommerce website?! They’re particularly recommended for ecommerce sites that sell higher value items.