One of the ecommerce trends this year is the focus on simplifying payment processes and enhancing flexibility with ‘buy now, pay later’ methods. More and more online stores offer subsequent payment methods and in many countries, this is already one of the most used payment methods of consumers. It is a contemporary digital payment form where the consumer, after the order has been received, receives the invoice via e-mail, after which the consumer usually has a few days to pay. Examples of this type of payment method are AfterPay, Klarna and Yehpay.
Why consumers choose ‘buy now, pay later’
First of all, it is a secure payment method, because the consumer does not have to enter payment details during checkout. In addition, the service aspect is a great advantage for many consumers. The consumer first checks whether the product is satisfactory and when this is the case, the customer pays. When products are returned, consumers only have to pay for the products they want to keep. This removes an important threshold for consumers to order online.
The advantages for the web retailer
Besides the fact that paying afterwards has benefits for the consumer, this also applies to the web retailer. Firstly, subsequent payments generate additional contact moments. Whereas in the case of prepayments, the customer contact typically stops after delivery, this is not the case with subsequent payments. After delivery, the consumer will receive an invoice and / or a reminder and a thank you afterwards. With these ‘extra’ customer contact moments, the web store can provide information with a personable experience.
In addition, the subsequent payment method offers the opportunity to acquire additional customer data. Receiving reliable customer data is much enhanced with subsequent payments, compared to advance payments, as additional information is initially required from the consumer.
Finally, the possibility of paying subsequently yields greater customer satisfaction, primarily for orders via a smartphone or tablet. Subsequent payments offers ‘peace of mind’ for consumers, as this method is perceived as safer.
In summary, offering flexibility with subsequent payments offer benefits for both consumers and etailers and it is important for this payment method to be included as a standard payment option.