Making the Most of Buy Now Pay Later – A Merchant’s Guide

Last month, we looked at some of the current challenges with buy now pay later (BNPL) solutions on the market. These included the high rates of credit approval declines, principally because most BNPL providers today only use prime lending. We saw that the cost of BNPL solutions is quite high for merchants, at 3-7 percent on top of normal credit card processing fees.

We also highlighted the confusing shopper experience at checkout, due to numerous BNPL solutions being offered at the same time. Integrating all those solutions individually is a very costly and time-consuming effort for merchants.

So, what should merchants do? Following is a checklist of actions ACI has put together that go a long way toward addressing the challenges BNPL faces today. 

One BNPL integration

In order for Merchants, and their customers, to have a much better BNPL experience, they must be able to access multiple types of BNPL lenders through one integration.  By bringing together a diverse network of prime, near-prime, and sub-prime lenders under one offering, merchants will enjoy higher consumer approval rates and in turn, increased sales and revenue. With one integration, one contract, and one vendor relationship, merchants will benefit from ease of access and reduced costs.

Simplify the consumer experience, increase acceptance rates

Merchants should look for a payment experience that is much smoother and simplified for the consumer by offering a single BNPL button, instead of several solutions stacked side by side causing potential shopper confusion and cart abandonment.

In addition, merchants should offer a single consumer credit application process to simplify the consumer experience and increase acceptance rates. If consumers only need to fill out one credit application but get access to a host of BNPL lenders integrated within one solution, it drastically increases the possibility of credit approval. In fact, merchants can expect to see up to 85 percent acceptance rate and a higher average ticket price when their BNPL offering includes prime, near prime, and subprime lenders.

Through a single unified BNPL solution, consumers have a much-increased chance of being approved for their purchase, with an option to be approved for an even larger purchase, now or in the future. The credit limit can be as high as $20K USD, thanks to a broad selection of lenders, ideal for high-end luxury retail, home furnishings, travel or home improvements.

Improving the performance of BNPL for merchants

With a better checkout experience and a higher possibility of consumer credit approval, merchants can expect to see some important performance improvements. Consumers want a seamless and frictionless payment experience, so beyond the uplift BNPL already offers merchants, they can expect to see a considerable rise on checkout conversion and a higher average ticket.

If the above criteria for a BNPL solution are met, the credit approval ratings will be where merchants see the biggest gains. With the mix of prime, near-prime, and sub-prime lenders on offer, much of the 70 percent consumer credit declines currently seen today will be converted into happy shoppers.

To learn more about how ACI brings together the right mix of BNPL providers, contact us today.