Pay over time: Why should you offer this solution on your e commerce store?
Customers now have many options to pay for their bills. And one of the growing payment method these days is pay over time. Buyers can pay for their products in fixed monthly installments. In United States, this method has made traditional credit industry into $1.8 trillion dollar e commerce opportunity. Then, we will give you further information about this paying method and why you should implement this to your e commerce store
What is pay over time?
With pay-over-time, customers will pay a fixed monthly payment in a period for their bills. After finishing their payment, customer will own the products. Different from tradition credit card, users won’t have to pay annual percentage rate (APR).
Pay over time can be applied in a variety of business and fields. It offers customers more budget-friendly solution and make products affordable.
However, keep in mind that though there’s no APR, but you still have to pay for some interest. For example, some transaction requires 10-30% APR, or maybe a down payment. But there’s still no annual fee.
Pay over time process
So, how does this payment method work? Imagine you want to buy a set of television worth $100,000. However, you don’t have that much money at the moment, so that you can’t pay the bill upfront. Then, with 0% APR, pay over time might be the right option for you.
Then, you will receive a link to apply for financing with a pay over time provider. After going into the link and filling in necessary information, you will be notified about the approval decision instantly. All above steps are carried out automatically with provider’s underwriting technology.
At checkout step, you will choose pay over time solution. Then, you decide the term you want to accomplish your payments: 3 months, 6 months or 12 months. After that, a window will pop up showing the fixed amount you need to pay for each month. This amount is transparent since it includes every costs and any interest.
After you agree to make the payment, shop will receive the full amount immediately. Then, financial providers will get the fees from merchants for collecting customer’s installments
After that, you will pay the fee monthly without having any extra fees. Your installments are fixed and transparent.
Therefore, paying over time can greatly benefit customers and shop owners. First, we will go through some of its advantages for customers
Advantage of pay over time for customers
People can buy their desired products immediately instead of saving up for months, or even years, This helps increase their buying power and allows them to buy what they need in a nick of time.
Different from traditional credit card payment when customers have to pay for high APR, buyers only have to pay a fixed amount of installments every month with no APR.
Not every people has credit cards. Therefore, pay over time comes in handy. It is a great alternative for credit cards, whose APR is very high.
Advantages of pay over time for sellers
Gain more customers
Needless to say, customers prefer shop offering different payment methods. Then, with pay over time, a great alternative for credit card, customers might feel more convenient. Moreover, since customers can pay for their bill immediately, this will increase their buying power. Also, you will receive the payment in full. Such factors will enhance your cash flow as well as profit
Increase average order value
Thanks to pay over time, people won’t have to save money aside for years to get their desired products. Thus, they can order more goods on your site. Secondly, all the information about the transaction is transparent. Customers will know how much they will pay each month, how much they owe. As a result, your average order value will be enhanced
Lowe cart abandonment
Have you ever put products into your cart, and then realize you don’t have enough money? Then, with the help of pay over time, your financial problem will be solved. Thus, this can reduce cart abandonment rate upto 11 %
Decrease returning rate
When using pay over time method, customer know that they will owe money. People are often afraid of debt. Therefore, they will choose their product and make purchase more carefully.
Provide customers with great shopping experience
Customers will be much happy when sellers offer them many paying options. They will become even happier with transparent information of their payment. Customers will acknowledge their exact monthly installments as well as their debt. There likely won’t be extra or surprise fees. Therefore, you can increase customer satisfaction thanks to this paying method
With increased number of customers, order value as well as customer satisfaction, you surely can earn more money.
Pay over time is accepted internationally
This paying method is popular in many countries these days. Within next few years, many people predict it will continue its upward trend even more. Moreover, pay over time can be used in many industries and field, from furniture, housing, and so on.
If you want to sell internationally, you can consider pay over time. Click here for further information about cross border selling.
What to consider before implementing pay over time
As mentioned above, paying over time can greatly benefit both customers and sellers. However, as a business owner, you must think carefully before apply this paying method into your business. Here are some factors you need to look into
Average order and inventory
If you are a small business, or your products are not very costly, you might not need paying over time since customers can easily pay with their cash. Also, pay over time platform can be costly. Therefore, for business with low average order value, applying this payment method might not be the best idea.
Your e commerce platform
You will need advanced technology for pay over time solution to work on your platform
Will your customers be interested and eligible
Last but not least, you must consider customer needs. Do many of your buyers prefer pay in installments, or they want to pay upfront? Will they approve this method, or they rather use traditional payments options?
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