There is a definitive gap left by traditional banks and financial institutions as far as payment transactions and online credit is concerned. Buy now, pay later concept through the instant payment process and online store credit is addressing the issues.
Can you imagine shopping, traveling, watching movies and even eating without paying immediately? Sounds too good to be true, isn’t it? Well, it is actually true, thanks to some fin-tech companies that have come with an innovative concept that helps customers—book tickets, shop online and even order food—all of this, in an instant without the worry of having to ensure that your cards have enough balance.
Welcome to the world of– Buy now pay later!
Buy now, pay later with its extension of online credit has slowly begun transforming online portals into—Shop now, pay later stores! Online portals are slowly getting acclimatized to this popular fin-tech innovation even as they bank on it to solve a few issues and enhance customer service and subsequent sales volumes.
Let’s look at how Buy now, pay later is heading towards making a difference.
Moving beyond Credit Cards – Current issues
Well, credit cards do help, but here is a catch – your payment process is still a multi-step procedure inviting for a time-consuming process and higher chances of transaction failures, which again, is a big deterrent to shopping. Multi-step payment process coupled with slow internet makes for a very allergic reaction to payments online and customers will more or less abandon the purchase.
The multi-step payment process tests the patience of customers not to forget the additional step concerning the OTP or one-time password where the shopper is required to even type a six to eight-character password. Understandably, the customer of today is short on time and would welcome a much easier and less complicated process.
Abandoning the purchase or cart abandonment is another big issue that has been bothering the online portals for some time now. Cart abandonment effectively ‘’kills two birds with one shot’’—it results in customer disappointment and reduced sales volumes. This, however, does not end here—customers will be doubly doubtful about a re-purchase on the site adversely affecting the image of the shopping portal causing further damage to both its reputation and sales.
A consistently recurring problem, cart abandonment stands as a testimony to the unsuccessful attempts by online portals to convert visitors into customers. A Statista report showed that travel and retail are amongst the top five industries having highest cart abandonment rates, while travel ranked second with 82.2% retail ranked fourth with 77.3%. The figures are exceedingly high and speak about the kind of issues online portals face not to mention a glaring gap between site visits and purchases. Under such deterring circumstances both shoppers and online portals need a plausible solution.
Shop Now, Pay Later to the rescue—Proposed solutions
Unless there is a simpler solution to the payment process, the gap between shoppers and online portals will only widen leading to a further loss of sales volumes. What is the solution then?
A simple payment process that avoids cart abandonment and ensures instant check-out is the solution for both shoppers and online portals. Thankfully, ‘’Shop now, Pay later’’ satisfies the requirements through its simple, single-tap and instant payment process thereby helping customers avoid cart abandonment and helping online portals retain conversion volumes.
Many customers shopping across online portals are finding this concept very useful and have already begun ‘’checking’’ the Buy now pay later as their preferred payment option as opposed to other options such as cards and mobile wallets.
A major achievement of Buy now, pay later is that it has managed to go beyond what traditional banks and financing institutions can do. Traditionally, a bank issues a credit card based on customer credit history. The increasing stressed assets of banks in India make it even more difficult for them to issue credit and this is creating a sort of an uneven balance in the purchase patterns between various demographics.
So, for someone who does not have the credit history, it is a big blow as s/he is losing out on this privilege while others have the luxury of credit. This is especially true for millennials or younger generation of students and professionals whose shopping needs are generally higher. Shop now pay later stores are indeed a blessing for the younger Indians looking to shop online.
Fin-tech companies through Buy now, pay later have collaborated with online portals transforming them into Shop now pay later stores. These stores now extend credit to the extent of few thousand rupees using which a shopper can purchase goods online, instantly. There are no more worries in the lines of—immediate payment, cash getting ‘’stuck’’ and transaction failures at the payment gateways as Shop now pay later solves all these issues with just one ‘’tap’’. It would be interesting to watch how the future unfolds for online credit as traditional banks now have competition in the form of fin-tech companies that have come up with a fascinating and yet, a very relevant concept.