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The Best Buy Now Pay Later Tools for Ecommerce

Your customers want to pay in installments, this let's them do that.

women holding tablet

What are Buy Now Pay Later tools?

Buy Now, Pay Later tools are an emerging category that blends the original practice of using a credit card or loan to ease your up front cash flow, but they ultimately operate as stand alone purchases where the 3rd party is like (but not actually) a new, one-time credit card for that specific purchase. The reason it is not actually like a credit card is because the installments are typically fixed and in some cases there are no fees, and in some cases it does not require a credit check to use this payment option. You will need to look at each individual tool to see exactly how they assess the users risk profile and approve their installment payment. I believe, in all, or at least most cases, you get paid immediately and carry no risk. Typically though, these companies charge a premium on top of your typical payment processing fee. For example, if you usually pay 2.9%/transaction, you might be paying 6.5% for a transaction through a Buy Now Pay Later tool, but it is typically worth it as these tools prove to increase conversion rate and average order value.

Buy Now Pay Later

What is

Sezzle

?

Sezzle is a buy now pay later tool that makes it easy to break up a large purchase into multiple installments, at no cost to the user.

Typically this is 4 payments over 6 weeks with 0% interest. Consumers love it because it does not require any credit or impact their credit score, and they will never be sent to collections for an inability to pay.

Merchants love it because it tears down a barrier that prevents some customers from buying… The pricing barrier.

This is truly a disruptor tool that is going after an underserved market of individuals that don’t have great credit, but are capable of paying off small debts.

And it’s an established multi-billion dollar industry. I can’t believe how many people ask me if this sort of thing works, yes, it works.

What is

Route

Route is a free for merchants shipping insurance app with built in visual package tracking, kind of like Uber, for your packages...

What is

Omnisend

Omnisend is the all-in-one marketing automation solution.

What is

Privy

Privy is an Ecommerce focused pop-up building tool that helps increase your on-site email (and Messenger, and web push) capture and conversion rates.

What is

Viral Loops

Viral Loops improves customer lifetime value by incentivizing word-of-mouth marketing in pre-sale and post-sale campaigns.

What is

Sezzle

Sezzle is a buy now pay later tool that makes it easy to break up a large purchase into multiple installments, at no cost to the user.

What is

Carro

Carro allows you to find out how many influencers have bought your product, subscribed to your email list, or follow you on social so you can build an authentic relationship with them to help sell your products.

Why Use

Buy Now Pay Later

apps?

Buy Now Pay Later tools create a sort of "Blue Ocean," often capturing a segment of your site visitor that wanted to buy, but didn't really have the budget right now. And those that do have some budget, may find themselves adding another product to the cart before checking out with a Buy Now Pay Later tool.

When should you be investing in

Buy Now Pay Later

apps?

You can use a Buy Now Pay Later tool at any stage of your business, most of them work as a percentage of sales that get processed through them. These tools have proven to resonate more with younger generations and those who may not have their own credit card. And naturally the older generations are less likely to adopt the tool. That doesn't mean it hurts your conversion rate to add the option to your site though.

Because they typically charge some sort of additional markup, you need to calculate how this impacts margin - which typically it has an overall positive increase on margin, but for low margin businesses, or one product businesses, maybe you can't recoup the marginal impact.

Companies with higher average order values benefit greatly from this tool, my sweet spot is when you're right over $100, maybe under $500. That is a really good spot to use a Buy Now Pay Later tool. That said, these tools can work for even lower average order value stores, and there are a subset of tools that cater to the larger purchases - typically those are more like a true credit line or loan.

Who is managing these

Buy Now Pay Later

apps?

This is an interesting tool category that kind of brings the whole team together. Marketing may push to install the tool, you need your head of Ecommerceto green light changes to the site. You need to talk with Finance on how this will impact payments and change processes. And you need to inform customer service on how to deal with issues realated to this tool.

What are the most important

Buy Now Pay Later

app features?

You should be looking for tools that are extremely user experience oriented. My preference are tools that offer 0% cost to the customer and don't do a credit check. You also want to make sure this tool integrates with your Ecommerce platform - Shopify, BigCommerce, etc.

Still unsure what’s right for you?

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