Break It Down: Five Tips To Choosing The Right BNPL Provider For Your Brand


Written by Affirm

Another digital-first holiday season is upon us.

Despite so much uncertainty in this unfamiliar privacy-first world in which brands are marketing, a few things are certain: Shoppers are digging deeper into their pockets to make up for last season’s pandemic-inflicted holidays and they’re pacing themselves by budgeting better.

“… Consumers are taking advantage of flexible payment solutions to help them spend responsibly this year. Over half of Americans are interested in using a pay-over-time solution for their holiday shopping this year and the majority (69%) will do so because they believe it helps them to better budget,” said Silvija Martincevic, Chief Commercial Officer at Affirm

“Buy now, pay later,” or BNPL, lets shoppers break their purchases into equal installment payments, often interest-free, which can make even the biggest-ticket items–like travel and fitness equipment–affordable between paychecks. 

Having seen an astounding +107% increase in purchases made with BNPL financing YoY thanks in part to the financial pressures brought upon consumers during the pandemic, opting for a BNPL option as a payment option is now a no-brainer. 

However, with so many BNPL providers now on the market, choosing the right one … that’s where brands are scratching their heads.

That’s why MuteSix partnered with Affirm, the industry-leading BNPL solution that has helped many valued clients exponentially boost Average Order Volume (AOV) and repeat purchases, to break it down once and for all.

Consideration 1: A Good Fit for Your Business

When evaluating a BNPL provider, you’ll want to see if they work well with businesses of your size. Do they easily process the volume of transactions that your business generates—especially during your peak seasons—without difficulty? Or if you’re a niche retailer, are they nimble enough to meet your needs so that you don’t feel like a low priority in their client base? And don’t forget geography: Is the BNPL provider a leader in the country—or countries—where you do business?

Look at their track record of working successfully within your industry. If they have a great reputation for accelerating growth for merchants in a different sector, you may encounter a few unwelcome surprises. Also consider your store’s average cart size. If you typically have orders that cost $1,000 or more, does your BNPL provider offer payment plans that work well for most customers in that price range?

You should consider how easy it is to integrate the provider’s technology into your checkout flow. Will the implementation require much developer resources on your end? Or is there an existing plug-in with a platform you’re already using for payment processing, e-commerce, or web hosting? 

Finding a good fit for the size, industry, and mechanics of your business is a critical first step in partnering with a BNPL provider. 

Consideration 2: Maximum Choice and Flexibility for Customers

When it comes to payment options, shoppers want a variety of choices. The key is to offer enough options to attract the most customers without adding friction at checkout.  

Flexibility is at the core of buy now, pay later. And varying the BNPL options you offer to shoppers can attract many different customers. Some shoppers prefer the popular pay-in-four model—four interest-free payments made every two weeks. Others may prefer to make monthly payments spread out over a longer term, with or without interest. 

Check to see what sort of flexibility your BNPL provider offers in terms of payment plans. Every shopper budgets differently, so make sure they have options for paying over time the way they want to.

Consideration 3: Expanding Your Customer Base

Partnering with a BNPL provider can play an effective role in your customer acquisition strategy.

Many providers have apps used by millions of active shoppers, and downloads of the apps have exploded in the last two years. If you work with one of these providers, your brand could gain valuable exposure on the app, which could drive a steady stream of shoppers who might not otherwise have come to your site or store.

Try to learn about the customer approval rates the BNPL provider delivers. These companies have different underwriting practices that may have an impact on the quantity of customers who get approved for a pay-over-time plan. 

Promoting your partnership with a BNPL provider is perhaps the easiest way to attract some new customers. In fact, 57% of BNPL users learned about the payment option from the product page of an item they purchased online, according to a PYMNTS research report. Just having the option to pay over time can move some shoppers to buy, and this can result in incremental customer acquisition gains.

Consideration 4: Boosting Customer Retention and Long-Term Value

As more shoppers get used to the convenience of pay-over-time and the flexibility it offers in managing personal cash flow, this form of payment will become even more common. In fact, a March 2021 study by the Motley Fool found 36% of BNPL shoppers use it once a month or more. So just offering BNPL to your customers could bring repeat business from people who love to shop this way.

Many shoppers are inclined to use BNPL again after they experience how easy it is and how it can give them more control over their cash flow. What’s more, most BNPL providers track an average repeat purchase rate from their customers and promote it on their websites. These are good indicators of driving customer retention and long-term value for merchant partners.

Of course a critical factor in sustaining any growth in repeat business is making sure the BNPL provider treats your customers well.

Consideration 5: Delivering the Best Customer Experience

Shoppers value trust as a key component of their BNPL experience. The Motley Fool study found that 30% of BNPL users trust BNPL providers more than credit card companies when it comes to fair business practices. Hidden or late fees, deferred interest, and pages of fine print are just some of the practices that breed distrust with credit card companies.

Building trust demands transparency. Check to see what shoppers experience with a particular BNPL provider: Are too many steps that could add friction at checkout? How easy is it to understand the payment schedule and terms? Make sure there are no gotchas in the BNPL shopping experience.

Finally, consider how a partnership with a particular BNPL provider can reflect on your business. If a shopper has a bad experience with a BNPL provider you’re working with, it may tarnish their opinion of your brand. That’s why it’s important to research a provider’s policies on hidden fees, interest payments, and late fees. Also look into the provider’s NPS score, which can be a good indicator of trust and loyalty among its customers. The fewer surprises, the better.

A Final Word: Not All BNPL Options Are Treated Equal

With the booming popularity of BNPL payment plans in a post-pandemic world, brands need to ask themselves, not if adopting one is the right choice, but which one(s).

Shoppers will continue to feverishly break their purchases down into smaller, more affordable payments this Q4 and beyond. As such, brands need to break their BNPL strategy down into basic considerations above. 

Remember, BNPL providers are a dime a dozen these days, but they’re not all treated equal. Take the time to really understand their products, then align them with your business needs and your customer wants. 

Only then will your brand truly realize the BNPL payoff.

About Affirm

Affirm’s mission is to deliver honest financial products that improve lives. By building a new kind of payment network — one based on trust, transparency and putting people first — we empower millions of consumers to spend and save responsibly, and give thousands of businesses the tools to fuel growth. Unlike credit cards and other pay-over-time options, we show consumers exactly what they will pay up front, never increase that amount, and never charge any late or hidden fees. Follow Affirm on social media: LinkedIn | Instagram | Facebook | Twitter

Special thanks to our friends at MuteSix for their insights on this topic.
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