In fact, 55% of local businesses use buy now, pay later online and 5% offer it as an in-store payment option, according to a February survey from payments news site PYMNTS.com.
If you’re thinking about offering buy now, pay later at your small business, here’s what you need to know.
HOW BUY NOW, PAY LATER WORKS
Buy now, pay later involves three parties: the customer, the merchant and the buy now, pay later provider. When a customer makes a purchase, the provider pays the merchant in full, minus fees. Then the customer pays the provider back in installments.
Buy now, pay later transactions cost merchants anywhere from 1.5% to 7% of a customer’s total purchase amount, compared to 1% to 3% for most debit and credit cards, according to a 2021 briefing from the Federal Reserve Bank of Kansas City.
For example, say your customer splits a $400 purchase into four payments of $100 each. If your buy now, pay later provider charges a 5% fee for this service, it would pay you $380 upfront for this transaction and collect the $400 from the customer over time.
WHY BUSINESSES OFFER BUY NOW, PAY LATER
Buy now, pay later may cost more than other payment methods, but advocates for the service say it brings additional benefits.
“We usually ask our retail clients not to think of us as a payment option, but as a new customer acquisition channel,” says David Sykes, head of Klarna North America.
This story is from the March 26, 2022 edition of Techlife News.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the March 26, 2022 edition of Techlife News.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Warren Buffett Has Left the Table. Homeless Charity Asks Investors to Bid on Meal With Software CEO
The California homeless charity that received $53 million over the years from investors who wanted a private lunch with billionaire Warren Buffett has found a new business executive to auction off a meal with.
A Congressman Wanted to Understand AI. So He Went Back to a College Classroom to Learn
Don Beyer's car dealerships were among the first in the U.S. to set up a website. As a representative, the Virginia Democrat leads a bipartisan group focused on promoting fusion energy. He reads books about geometry for fun.
INTERNET PROVIDERS MUST NOW BE MORE TRANSPARENT ABOUT FEES PRICING, FCC SAYS
Much like nutritional labels on food products, “broadband labels” for internet packages will soon tell you just what is going into the pricing of your service, thanks to new rules adopted by the Federal Communications Commission this week.
CONTENT CREATION HOLDS APPEAL FOR LAID-OFF WORKERS SEEKING FLEXIBILITY
With a compact mirror in one hand and an eyelash curler in the other, Grace Xu told her roughly 300,000 TikTok followers she was likely about to be laid off.
IN ALEX GARLAND'S POTENT 'CIVIL WAR,' JOURNALISTS ARE AMERICA'S LAST HOPE
The United States is crumbling in Alex Garland’s sharp new film “ Civil War, “ a bellowing and haunting big screen experience.
MARGOT ROBBIE MAKING 'MONOPOLY' MOVIE AND BLUMHOUSE REVIVING 'BLAIR WITCH'
Margot Robbie has her sights on another toy. The “ Barbie “ producer and star is making a Monopoly movie, with Hasbro and Lionsgate behind it, the companies announced Wednesday at the CinemaCon conference in Las Vegas.
SOME STATES ARE SEEKING TO RESTRICT TIKTOK. THAT DOESN'T MEAN THEIR GOVERNORS AREN'T USING IT
POV: You’re on TikTok, and so is your governor — even as your Legislature considers banning the app from state-owned devices and networks.
HERE'S WHAT WE KNOW ABOUT UBER AND LYFT'S PLANNED EXIT FROM MINNEAPOLIS IN MAY
The future of Uber and Lyft in Minneapolis has garnered concern and debate in recent weeks after the City Council voted last month to require that ride-hailing companies pay drivers a higher rate while they are within city limits.
BIDEN ADMINISTRATION SETS FIRST-EVER LIMITS ON SO-CALLED 'FOREVER CHEMICALS' IN DRINKING WATER
The Biden administration finalized strict limits on certain so-called “forever chemicals” in drinking water that will require utilities to reduce them to the lowest level they can be reliably measured.
COURT UPHOLDS CALIFORNIA'S AUTHORITY TO SET NATION-LEADING VEHICLE EMISSION RULES
California can continue to set its own nationleading vehicle emissions standards, a federal court ruled this week — two years after the Biden administration restored the state’s authority to do so as part of its efforts to reverse Trump-era environmental rollbacks.