The Buy Now Pay Later (BNPL) space is expected to reach $20.4 billion global market by 2028 and with all segments that have been disrupted, businesses need to pivot and go along for the ride.
So as a business owner, what are some of the advantages integrating a 3rd party BNPL platform into your business.
Well, let’s have a look.
- 1. help convert browsers into customers
- 2. increase your average order value
- 3. can improve your customer life cycles
What is ‘buy now, pay later’ and how does it work?
‘Buy now, pay later’ offerings are specialised credit lines in consumer finance that works as an incremental payback system – making it easier and more attractive for people to pay for goods and services.
These third-party providers offer consumers an interest-free loan on the condition that the balance is paid back within a certain time frame. Once that time frame is up, if there is still an outstanding balance, interest rates or late fees begin to apply.
Since their arrival on the scene, micro-loan-as-payment options have taken off everywhere in retail, including fashion, homeware, and hardware outlets, as well as in-store and online. Even tradies and micro-proprietors have started integrating it into their billing platforms, however as a business owner it is important to understand that you are partnering with a micro – loan- as-payment provider and if the opportunity a rises to explain the product, then the way it should be framed should be “it’s more like a credit card and less like a layby – if you pay your credit card bill on time then you have nothing to worry about which is the same thing for BNPL”
As a business owner your focus needs to be on conversions and whether your customer pays via a credit card, BYNPL, “Hell we’ll even take bitcoin” it is the customers responsibility to be conscious of their spending habits however all responsible businesses need to be transparent and inform customers of potential risks as you don’t want anything comeback on you therefore a quick disclaimer on all your marketing material is always a good idea to protect yourself.
The subsequent side of this new phenomenon is BNPL for business, essentially working capital for business owners so a SMB can pay it back in 4 instalments.
Let’s do a quick deep dive.
The BNPL platforms tend to have a more consumer mindset. When they need a product, they need it right away.
Which is also true for working capital however we at APICKLE don’t believe you can replicate this model into a working capital solution.
BNPL Working capital for business fee structure.
Obviously, the fee structure follows the same philosophy as that of the retail product.
Payments are interest-free for 60 days, or the business can pay in four equal monthly instalments for a 3% fee.
Late payments incur a $25 flat fee, and any customer with an account in arrears won’t be able to access more credit.
However, a BNPL provider makes their money from the late fees in which their customer incurs so our concern is that business revenue is not always consistent therefore a SMB may not be able to make that repayment ultimately getting the business owner into a bit of APICKLE….
We believe that a business that adds our Working Capital Facility to their buy now and pay later strategy have a greater advantage over their competitors because business owner can manage their finances and stock levels with greater flexibility while being able to take advantage of the next converted BNPL leads.
APICKLE’S Working Capital Finance Facility is repaid as a percentage of your daily sales, so there’s no monthly bills.
The Working Capital that you will receive is the average of your last 6 months turn over and your repayments are automatically deducted and flex with your daily turnover, so it a set and forget you can even get a top up when you’re ready.
If you earn $1 then we deduct a small % as a repayment if you don’t earn $1 then we deduct zero, nilch, nada putting you in control of your finances.
Your business deserves more. Grow with APICKLE as your capital partner.
Apply today. – its easy and only take 10 mins with funds settled within 24 – 48 hrs.
