According to a consumer survey by independent finance product website, Mozo, 50% of Afterpay users said they spent more using Afterpay than when using a debit or credit card. More than 10% of online sales in Australia are now made using Afterpay and it claims to have attracted one in every four millennials to its platform.Īfterpay states that the benefits of their service are that customers end up spending more per transaction, and then continue to come back. Retail sales through Afterpay totalled NZ$2.4 billion as of March 2019. Once set up, Afterpay appears as a payment option at checkout. Merchants can adopt it in their online store through the API or their integration with popular e-commerce platforms such as Shopify, Magento and WooCommerce. To use this service, customers need to create an account and provide details such as their name and credit/debit card details. Put simply, buy now, pay later services are an interest-free alternative to credit cards where consumers can see their individual purchases being paid off.Īfterpay has over 200,000 users in New Zealand. Instead, it creates sales out of customers who may not have been able to follow through with purchases in the past and opens the market for new customers. The benefit for retailers is that it captures customers who would have normally abandoned purchasing due to their financial situation at the time. Popular stores such as Glassons, Cotton On, and Farmers all offer buy now pay later options to their customers. In New Zealand the buy now, pay later option is available to customers over the age of 18 with credit or debit card details and a valid New Zealand ID. Some providers may also run a credit check to make sure customers are able to pay off their purchases. In most cases if the payment deadlines are met then there is no additional fee (for example, a late payment fee). Any additional fees also depend on the provider. Each provider has different time periods in which consumers need to pay back the cost of the items. The main buy now, pay later providers are: Afterpay, Laybuy, PartPay, OxiPay, ZipPay, and OpenPay. Payment schemes for the consumer differ between buy now, pay later providers. What are the different buy now, pay later options and how do they work? Your customers will always appreciate a variety of payment options. Keep in mind that you’re able to offer multiple buy now, pay later services. They appear alongside your other payment options at checkout and can be included in your online store through an API or plugin. Buy now, pay later options can be used both online and instore and have already been widely adopted in retail, fashion, homeware, and hardware stores. It’s a great way to attract consumers who are willing to spend but don’t want to save the money up beforehand. This allows them to take advantage of limited time sale periods for example. Why is buy now, pay later becoming popular?īuy now, pay later creates more flexibility for consumers as they don’t need the full amount in cash to buy an item. The difference between this and a credit card, is that you don’t pay any interest. A $100 purchase for example, becomes four $25 payments over four weeks with Afterpay. The merchant still gets paid (usually within two business days) while the consumer receives their desired products and services, and then pays the rest to the service provider in instalments. If the consumer can’t afford the full cost of a purchase right now, they can use a buy now, pay later service (like Afterpay) to make the payment for them. Buy now, pay later sites are websites or apps that allow consumers to purchase products now, but pay the full amount over time with a number of smaller instalments.
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