76% of U.S. consumers are more likely to make a purchase if offered a payment plan at point-of-sale, according to a Citizens survey. However, those struggling to keep up with payments could be faced with late fees or hit on their credit score. In this blog, we cover how brands and retailers can do their part to support and educate consumers on how to use BNPL responsibly and avoid major financial consequences.
The importance of consumers being informed about BNPL services and how they vary
According to Lending Tree, 42% of Buy Now, Pay Later users have made a late payment, so it’s important for consumers to be well informed about policies around late payments that vary among the many BNPL firms.
For example, Afterpay allows you to reschedule your second and third payments in the app, but if payments are already past due, late fees may be charged and you could face account suspension. Affirm, on the other hand, does not charge late fees, but late payments may hurt your credit score.
How Brands and Retailers can improve these services for consumers
Educate Consumers on Installment Payments: Today’s typical point-of-sale terminal or online checkout system usually offers multiple payment options including credit, debit, and now BNPL offerings like Affirm and Klarna to eligible consumers. Brands and retailers can take this offering a step further by providing transparency on installment payments terms and educating consumers on how it works.
Provide Financial Literacy Tools: Retailers and brands can further prevent negative financial consequences for their consumers through offering financial literacy tools designed to help young shoppers navigate BNPL platform and track spending, including branded educational materials and budgeting tips shared via their influencer partners, WGSN strategist Cassandra Napoli suggests.
Improving POS Services for Your B2B Customers
B2C customers are not the only ones that benefit from BNPL. In fact, many wholesale platforms like NuORDER now offer Buy Now, Pay Later and instant financing services as part of their payment services for B2B customers. Here's how these services are transforming wholesale for your B2B customers.
Buy Now, Pay Later for Business: More and more wholesale platforms have pay-later POS financing integrations. Unlike consumer-facing options, the wholesale version is often only available at a low interest rate. Still, they share many of the same advantages; most notably, merchants enjoy better cash flow management and improved buying power. It encourages retailers to give new brands a chance while increasing the odds of boosting AOV. Using wholesale software can make the process easier for all parties.
Instant Financing: However, BNPL isn’t the only POS financing option for businesses. Some wholesale eCommerce companies are cutting out the middleman to offer flexible credit and financing options at checkout. For example, brands selling on NuORDER may accept credit card payments, offer split payments and set up flexible payment terms. The platform can even be used to enforce those payment terms. For example, let’s say you have a brand and your terms state you’ll get paid once your goods have shipped. You could set up “charge upon shipment” in NuORDER to automatically charge the retailer as the goods leave your manufacturer."
Together with Lightspeed, NuORDER is working to revolutionize wholesale ordering with the power of connected commerce. Our launch with Lightspeed Commerce provides a new solution for brands and retailers to not only network with one another, but also seamlessly take B2B orders directly into the point of sale system all on one centralized platform. We're providing an automated omnichannel retail experience so that you can start selling fast on any channel, save hours of manual entry, and get accurate inventory data.
To learn more about our launch, click here.
