Debit cards are still popular as a way to pay for everyday purchases. Now, customers are increasingly choosing to use BNPL (Buy Now Pay Later) for large purchases. This offers both customers and merchants several meaningful advantages over credit cards. Here is a quick guide on how to use BNPL to drive more sales online.
What’s BNPL?
How does buy now pay later work? The term ‘BNPL’ refers to customers being offered the option to make purchases on credit provided by the merchant. Some merchants run their own in-house BNPL schemes, but even amongst larger merchants, this is becoming rarer.
It’s generally more cost-effective, safer and more convenient to use a dedicated BNPL service like ClearPay. These services are run by experts who understand the law related to instalment payments. They also comply with all other relevant laws such as GDPR.
Offer Buy Now Pay Later with Square x Clearpay
Attract new shoppers and drive incremental revenue. Businesses using Square Online can now offer buy now pay later as a payment option through Square and Clearpay integration.
Who uses BNPL?
Initially, BNPL usage was very heavily driven by younger adults. Firstly, they were the demographic least likely to have credit cards. In some cases, this was because they couldn’t access them; in others, it was because they didn’t want them. Secondly, younger adults tend to be very open to trying new services and technology.
Since 2019, research shows that the use of BNPL has spread across the population as a whole. It has also expanded outside of the sectors that are typically highly popular with young adults (e.g. fashion). It’s also moving into the real world instead of just being available online.
Why is BNPL so popular?
Customers appreciate having access to credit. Both private individuals and businesses need to look after their cash flow. Using credit generally causes less disruption to the cash flow than making large single payments. It also means that people and businesses can make purchases without having to save up for them first.
For customers, traditional personal or business loans can be an economical way to finance very large purchases. But they are way too cumbersome for regular big-ticket purchases. Credit cards are convenient but notoriously expensive. BNPL services slot nicely in between these two options.
If a customer pays for their purchase over three or four months, BNPL is generally interest-free. If they pay over 6–12 months, interest is usually charged. However, it is still likely to cost significantly less than using a credit card.
From a merchant’s perspective, offering BNPL means that you can make bigger-ticket sales to customers who don’t have credit cards. You can also encourage customers with credit cards to use a more affordable method of payment. Although you pay fees for using BNPL, these tend to be much lower than credit card fees.
How can BNPL help your business?
Research shows that offering BNPL helps to drive conversion and encourages customers to place larger orders. In fact, the uplift from BNPL can be 20–30% higher than the uplift from accepting credit cards. What’s more, the cost of offering BNPL is often much lower than the cost of accepting credit cards.
You can also benefit from exposure. For example, you can undertake co-branding activities and receive direct referrals. This helps to generate new business and prompts existing customers to return.
What is ClearPay and how does it integrate with Square Online?
ClearPay is an established, reputable and highly trusted BNPL service. It pays you up front for purchases while customers spread payments over six weeks. Customers pay a deposit and fortnightly instalments. All payments are interest-free.
Square offers ClearPay as an integration with its payment ecosystem. Use it with either your Square Online store or your Square Payment Links links. Offering BNPL with ClearPay and Square is easy. Just switch it on in your settings; you can switch it off again at any time.
Ways to drive more sales for ClearPay and Square Online
Once you’ve signed up for ClearPay through Square Online, make the most of it. Here are some ways you can use ClearPay and Square Online to drive more sales online.
Display ClearPay prominently on your website
If you go to a real-world store, you see the payment methods they accept displayed on the door, in the windows and at the paypoints. Larger stores often display their payment signage in strategic locations on the shop floor as well.
Follow the same principle online. Make sure that the ClearPay signage is on all pages so customers see it wherever they go.
Reference it on your socials
Your social media content is likely to be seen by a combination of existing customers and people who find you through search. Your existing customers may be aware that you support BNPL and it is helpful to remind them. People who find you through search may consider this to be key information.
Reference BNPL in your promotional posts, paid adverts and your bio. Where platforms allow you enough space, mention your BNPL offering in your regular non-promotional posts.
For example, Instagram has a space for captions, YouTube has a description box and Facebook has ample space for both text and images/video. Mention BNPL here to reinforce your overall marketing.
Feature it in your email newsletter and loyalty programme
Your email newsletter and loyalty programme are ways to reach your most engaged customers. This makes them potential brand ambassadors, so consider incentivising them to spread the word among their social network.