The Rise of Alternative Payment Methods: Focus on BNPL
The payment landscape has witnessed a shift in recent years, with contactless, installments, and channel-less payment methods gaining popularity. Digital wallets like PayPal and Apple Pay, as well as cryptocurrency payments such as Bitcoin, exemplify the increasing demand for frictionless eCommerce transactions. Statista projects that the total transaction value in the digital payments segment will reach $8.49 trillion in 2022, underscoring the continued growth of these trends.
The Importance of a Seamless Checkout Experience
While many online retailers focus on optimizing their websites and personalizing product recommendations, they often overlook the crucial aspect of the customer experience: the checkout process. Research from the Baymard Institute reveals that a lengthy or complicated checkout process leads to cart abandonment by approximately 17% of shoppers. Additionally, 9% of shoppers abandon their carts when an online store lacks payment method options. These statistics highlight the significance of a smooth and efficient checkout experience in closing sales and satisfying customers.
Buy Now, Pay Later: Revolutionizing Online Shopping
Among the alternative payment methods, Buy Now, Pay Later (BNPL) stands out as a point-of-sale financing solution that enables customers to pay in installments rather than upfront. The number of BNPL users is projected to increase, accounting for 44% of digital buyers by 2025. Consumers are drawn to BNPL for various reasons, including avoiding credit card interest, making purchases that fit their budget, and accessing financing options without a credit card. The ease of use and quick approval process also contribute to its appeal.
The Impact of BNPL on Ecommerce
BigCommerce’s Global Consumer Report sheds light on the growing influence of BNPL in the ecommerce landscape. Global Google search trends indicate a significant increase in searches related to “buy now, pay later” and related apps. Moreover, 16% of respondents in the report have used BNPL as a payment method while shopping online. It is evident that BNPL is making its mark and becoming an integral part of the online shopping experience.
Pros and Cons of Choosing BNPL
For those who have used BNPL, it offers advantages such as fitting purchases into their budget and providing convenience and transparency. On the other hand, some consumers are deterred by their preference for outright payment or credit card use, a lack of understanding about how BNPL works, and concerns about late fees or credit score impact. Educating consumers about BNPL and clarifying late fee policies can help build confidence and demonstrate its viability.
Our own experience with BNPL
We worked with Crosley Brands, specializing in furniture and radio products to provide a seamless checkout process and various payment options. By incorporating the buy now, pay later (BNPL) solution Sezzle Pay, Crosley Brands experienced an increase in conversion rates. This was a great addition to the checkout experience and helped our client ace customer satisfaction.
Embracing a Customer-First Commerce Experience
Forrester highlights the transformative power of commerce in payments, making them an indispensable part of a seamless and customer-centric shopping journey. Every touchpoint, including online payments, plays a pivotal role in securing sales and meeting customer expectations. To remain at the forefront and address the needs of today’s consumers, businesses must prioritize a quick and effortless checkout experience while offering a wide selection of payment options.
In conclusion, as the payment landscape continues to evolve, businesses must adapt to the changing preferences of consumers. The rise of contactless payments, digital wallets, and BNPL solutions like Sezzle Pay demonstrates the demand for convenient and flexible payment options. By providing a seamless checkout experience and incorporating BNPL solutions, retailers can enhance conversion rates, reduce cart abandonment, and ultimately improve customer satisfaction. As the digital payments segment continues to grow, it is essential for businesses to prioritize a customer-centric approach and offer a diverse range of payment methods to meet the evolving needs of their customers in today’s fast-paced eCommerce environment.