In the last decade, there has been a huge shift in the way that consumers pay for goods and services online. At the turn of the century, PayPal was the new kid on the block – now it’s commonplace. More recently – and fast-tracked during the pandemic – we’ve witnessed an explosion of interest-free buy now, pay later (BNPL) finance providers and other alternative payment options. While this can offer consumers increased choice, and more choice is generally seen as a ‘good thing’, it can be tricky for merchants to find the right platform for both their business and customers.
We’ve recently partnered with humm, an established consumer finance provider from Australia. To help you navigate this changing landscape, they’ve prepared your Top 6 checklist identifying the key questions to consider when choosing payment options for your business. Read on to find out more.
1. Does the payment provider align with your business principles?
When it comes to your business, your principles, ethics and values are everything. Your customers are what matter the most, and keeping them protected is something we all have an obligation to do. Unfortunately, not all BNPL providers are created equal, and some encourage their customers to overspend without having the means to pay the debt off.
Understanding the values and principles behind your chosen payment provider is a must in maintaining the level of service your business prides itself on, without putting your customers at risk of getting into debt.
2. How flexible is flexible for your customers?
It’s super important to think about what’s going to work for your business and consumers to understand exactly what flexible payment options you both need.
You might be happy offering your customers long term low-interest bearing payment plans. Or you might only need to offer $500 over a short period of time.
Ultimately, there’s no one-size-fits-all approach, which is why certain providers believe in being as flexible as you need, with various plan options and limits to suit every business.
3. Minimising the cashflow risk
It’s understandable for businesses to be concerned about cash flow being impacted by slow payment times and high merchant fees. But you needn’t worry – the majority of BNPL providers shoulder this risk, minimising the impact on businesses and easing cash flow problems for both them and their customers.
With humm, merchants get paid upfront the next business day (minus a small merchant fee). This means you’re not left out of pocket and can get on with the day-to-day running of your business without cash flow issues holding you back.
4. Conversion vs consumer protection
According to a report by RBC Capital Markets, BNPL can help boost conversion rates to 20-30%1. In fact, consumers have embraced the buy now, pay later payment option so much, that it grew an estimated 41% in 2021 2.
However, while your ultimate goal with having a finance provider is to drive sales and grow your conversion rate, you also need to consider protecting customers when approving their applications. This means only lending to the people who can afford to pay it back.
Doing your prior research into how your chosen finance provider accepts and approves customers can save you headaches in the long run. It’s also an important step in maintaining your brand values, whatever they may be, and can make your customers’ lives feel that little bit better.
5. Offering customers a great experience
These days, consumers are time-poor. They don’t have endless hours to waste faffing around with clunky systems and dealing with poor customer service. That’s why businesses that offer quick and easy access to finance are already two steps ahead. Customers want:
- An easy-to-use app or website where they can find answers to their questions in a simple click
- The ability to pay back their loan early if their finances allow
- Good customer service (they’d rather talk to people instead of robots)
Ensuring these are in place when choosing your financial provider will help ease potential customers’ pain points, turning them into repeat fans.
6. Which audience are you looking to reach?
There are many different consumer finance providers available for various stages of life. Whether your customers are Gen Zs looking to finance their fashion or millennials wanting to make essential home improvements, choosing the right provider is vital for attracting the right audience for your business.
humm typically targets financially savvy consumers spanning millennials through to young families aged between 25-45 with bigger needs and life commitments. This includes fitness, home, health, tech and solar, with the aim to make more of life, more affordable.
Make life humm
The new payment partner, humm, is a responsible lender that is truly designed with the customer in mind. It encompasses all areas of life, from fitness gear to dental care, to home renovations and everything in between. As such, they’ve been trusted by retailers and consumers for over 30 years.
Offering a flexible and reasonable time to make payments, it’s all about improving the financial lives of customers, instead of profiting off their debt. That’s why it jumped for joy after becoming FCA regulated in February 2022. Plus, with the UK government looking to regulate the sector in the not-too-distant future, being regulated also means that humm is future-proofed for when the new rules eventually come into play.
To find out more visit https://www.nopcommerce.com/humm