The COVID-19 pandemic has affected the Philippine economy. It added more financial stress to low and middle-income families. That is why some credit card users have minimized paying for services and products using this payment method. Other more favorable payment options have cropped up – one of which is the Buy Now Pay Later (BNPL).
As an alternative, this option allows shoppers to buy products, and pay for them at a future date. This type of short-term financing has minimal to no interest rates or hidden fees. According to woocommerce.com, the size of the U.S. BNPL lending market was worth around a few billion U.S. dollars in 2019. But it is estimated to grow by 1,200 percent by 2024.
Likewise, the medium to the long-term growth of Buy Now Pay Later Philippines remains strong. This BNPL payment adoption is expected to grow over the forecast period, recording a CAGR of 50.9% from 2022 to 2028. The BNPL Gross Merchandise Value in the country will increase from US$ 383.1 million in 2021 to reach US$ 9476.8 million by 2028.
Benefits of Using BNPL Payment Method
Many consumers avail of the BNPL option to buy goods and pay for them in the future. Also known as “point of sale installment loans,” this payment is now the trend when shopping online. With the rapid growth of BNPL solutions, online retailers should not miss the opportunity to join the bandwagon.
The most common BNPL users have been the younger generations. These are the Millennials and Generation Z. According to a study by Forbes, the growth of BNPL among Gen Z has grown 600% since 2019, while the rate for Millennials has more than tripled. Yet, the BNPL adoption by Gen X and Baby Boomer generations is not far behind. This points to the possibility of the BNPL becoming the primary payment method. The benefits of using the online BNPL solutions are two-pronged:
Upon checkout, BNPL allows the buyer to:
- Buy items outside their usual budget;
- Choose the payment terms that are most favorable to them;
- Pay in full after one month; or
- By installment;
- Avail financing without the usual credit check; and
- Enjoy lower or no interest rates.
The BNPL solution allows the retailer to:
- Immediately get paid;
- Attracts new customers;
- Increase sales conversion and income;
- Experience repeated product purchases from (loyal) customers;
- Protects both the buyer and the retailer.
How Does BNPL Work in WooCommerce?
WooCommerce is a customizable, open-source eCommerce platform built on WordPress. By adding the plugin to your website, you can immediately set up your online store. This covers secure payments, configurable shipping options, flexible payment solutions, and more. By applying the Invoice Payment Option, your customers can buy your products.
The Invoice Payment Option extension enables you to add a new invoice payment method. This will let your customers place orders without making any payment. You can rename the payment method to Buy Now Pay Later or give it any other name that suits your business requirements.
A few retailers own their BNPL service but most retailers have a third-party provider. These retailers pay the provider a commission plus some fee for each transaction. As a retailer, you must first know the right items to sell and to whom, when choosing a BNPL provider. Next, you have to consider the repayment terms, credit limit, and service area, among other things.
As the Buy Now Pay Later payment plan is now a global craze, Filipino MSMEs (Micro, Small, and Medium Enterprises) should not be far behind. With the right approach and technology, you can have your own flourishing e-commerce store. However, many MSMEs agree that developing their e-commerce store takes weeks or months to complete.
This is where TekWorx PLUG n SELL comes in. This 100% OWNED Online Store is pre-designed and pre-developed by experts with E-Commerce and Digital Marketing in mind, at an introductory price of only Php 5,990 per Year! See some of the ecommerce website design templates that are perfectly suited for online stores.
Built on the WooCommerce platform, this full-fledged e-commerce website, can get you selling online in 7 days or less after sign-up. We also offer a free consultation to help you realize your dream of employing BNPL for more sales and new customers. This could mean not only bigger orders but fewer abandoned carts.