Digital Retailers Should Know These Basics About 'Shop Now Pay Later'

 

For digital retailers, providing the ‘shop now pay later’ option to customers is a sure-shot way of boosting sales. Over the last couple of years, many popular e-commerce sites and POS machine service providers have highlighted this payment option to draw in more customers and amplify conversion rates. Just like the popularity of QR code payment or ‘scan and pay’ option has witnessed a massive boom in the recent past for conventional retail stores, the ‘shop now pay later’ payment option has been received a tremendous response from online shoppers.

Understanding the concept of ‘shop now pay later’

The concept is simple. Digital retailers allow customers to order and receive the chosen product right away but pay for it later, either in full or instalments over a specified ‘interest-free period’. For instance, a customer can purchase a refrigerator worth Rs 30,000 and choose to pay for it in 6 months. Having provided his/her card details, Rs 5000 will be auto-deducted from the card for 6 months, and no interest will be charged. If the customer cannot pay within the specified period, then the applicable interest rates will be charged on subsequent payments. For every such ‘get now pay later’ transaction, the retailer has to pay a fixed commission (2 -5%) to the POS company or POS machine service provider.

Win-Win Situation

Despite the commission levied, this payment option has massive benefits for retailers. It is a tried-and-tested method to convince shoppers to go ahead with high-value purchases, without worrying about immediate affordability. Merchants reap the benefits of higher sales, while customers have a win-win situation of availing interest-free loan facility for big shopping amounts. Just like QR code payment or ‘scan and pay’, the ‘shop now pay later’ POS enablement has revolutionized digital and contactless payment technology like never before.