How Has Buy Now Pay Later Helped Retailers During The Pandemic?

Retailers are always willing to adopt new ways to encourage the consumer to buy, especially during the pandemic when retail sales have seen a huge slump due to restrictions. Fortunately, there are proven ways to encourage shoppers to go out there and spend their money.

Among these is the Buy Now Pay Later model, the next big payment trend to overtake online retail shopping. Read on to know what it is and how it is helping retailers during the pandemic.

Different Types of Merchant Payments

Merchant payments are the payment systems retailers use to facilitate payments. The most common types of merchant payments include:

  • cash
  • credit/debit cards
  • mobile payments
  • electronic payments


This is the most common and easiest form of payment. Almost all establishments accept payments in cash because it is widely used and cash payments are upfront and immediate. They also don’t come with any hidden fees.

Debit cards /credit cards

Credit cards allow shoppers to shop using the line of credit issued by their banks in exchange for regular payments with interest. Debit cards work the same way as credit cards except that they are not attached to a line of credit. Instead, they facilitate direct withdrawal from the cardholder’s account at the point of sale.

Mobile payments

Mobile payment systems like PayPal, Apple, and Google Pay are payment systems based on these websites or apps. Point of sale systems provided by Paypal or Apple allows retailers to receive and make payments directly from their Paypal or Google Pay accounts.

Electronic bank transfers

Electronic bank transfers are transfers facilitated when users log in to their bank accounts online and transfer funds from one account to another using their smartphone or computer.

What is Buy Now Pay Later?

Buy Now Pay Later or BNPL is a point of sale financing model that allows shoppers to pay for purchases in installments over time, often with zero or very little interest or fees. This payment model is convenient for consumers who like the freedom of being able to buy items at will without having to worry about the current balances on their credit cards and online wallets.

How the BNPL Model Helps Retailers During the Pandemic

Grows customer Base

The Buy Now Pay Later model is attractive to both new and old consumers. Stores and retailers have a better chance of drawing new customers who would not have visited their stores unless they have this consumer financing in place.

Attracts credit-card averse consumers

This POS financing scheme is very attractive to credit-card-averse consumers who want to shop without the high-interest rates and hidden fees common in credit cards. Buy Now Pay Later charges zero or very little interest which means that shoppers only end up paying for the actual price of the item.

Increases repeat purchase

The ability to ‘pay later’ can be extremely satisfying for many consumers which will likely lead them to patronize establishments for the long term. Customers are more likely to see their shopping experience as favorable if the retailer offers multiple options in terms of ways to shop, how to pay, and a variety of products to choose from. With this flexibility, retailers often see increased customer loyalty and in turn, an increase in repeat purchases.

Increases conversion rate for offline retailers

There is a unique high when you know you’re coming home with shopping bags. This is something that the online shopping experience can never replicate because it is unique to offline shopping. BPNL offers customers the ability to buy something and take the items home on the spot. Being able to offer this kind of experience can help retailers with physical locations boost their conversion rates by up to 30%.

Full payment at point of sale

While payment for each item is spread out over the installment period, retailers are still guaranteed actual sales and upfront, full payments. This is because the payment provider is the party that shoulders the credit risks. Merchants won’t need to deal with late payments and they can move inventory at an ideal pace.


Merchants that use the BNPL model, especially from secure and reliable providers like see a marked increase in transaction value because more consumers are willing to spend more money if this option is available at the point of sale. Shoppers are more willing to indulge in impulse purchases with BNPL and they can shop anytime regardless if they have actual access to cash. All these naturally help boost average transaction values in both offline and online retail shopping outlets.

The best part about this model is that it can be integrated with the various types of merchant payment systems, from offline financing methods like cash to online financing using bank transfers or digital wallets. These, among the other advantages mentioned above, make selling easier for retailers while making the shopping experience more fun for buyers.

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