Why Klarna and Afterpay are Game-Changers for Business Owners

In today's fast-paced world, convenience is key, especially when it comes to making purchases. This is where payment platforms like Klarna and Afterpay are really changing the online retail landscape. According to recent statistics, up to an impressive 70% of online shoppers now use payment plans A.K.A “buy now, pay later” options. (You can check out this study from the Canadian Government for more facts) Which shows a significant shift in how consumers are purchasing and their preferences for how they choose to spend their money online.

So, what exactly makes Klarna and Afterpay so popular, and why should more business owners consider integrating these payment options into their business strategies?

1. Better Shopping Experience

One of the primary reasons behind the rise of Klarna and Afterpay is the seamless shopping experience they offer. These platforms allow customers to split their payments into manageable installments, making it easier for them to afford higher-priced items or multiple purchases - A.K.A. easily accessible payment plans.

For businesses, this means increased sales and reduced cart abandonment rates. When customers find it easy to pay, they are more likely to complete their transactions rather than abandoning their carts because they couldn’t figure out how to pay you. In other words, if it is easy to pay you - they will pay you!

2. Flexibility and Affordability

The flexibility and affordability of payment plans offered by Klarna and Afterpay are also major wins. Instead of paying the full amount upfront, customers can spread their payments over time, making purchases more accessible and budget-friendly and usually are presented to be interest free. Meaning that they won’t have to pay extra for paying over the set amount of time.

This flexibility not only attracts budget-conscious shoppers but also encourages repeat business. Customers are more inclined to repurchase or purchase more from a company that offers convenient payment options that align with their financial needs.

3. Risk-Free for Customers

Another reason there is a rise in the popularity of Klarna and Afterpay is the risk-free nature of these payment plans for customers. Unlike traditional credit options that may incur interest or fees, these platforms often charge zero interest or fees for customers who make timely payments.

This peace of mind encourages customers to make purchases without worrying about hidden costs or financial burdens down the line. It's a win-win situation for both customers and businesses, fostering trust and loyalty in the process for your business.

Personally I just used Klarna to buy my favourite products from BeautyCounter - instead of spending $140 I spent $35 -- which I spread out over time helping me keep true to my weekly budget for 'products'. And you know living in a tiny house - I have to be SUPER intentional with my products!  

4. Increased Conversion Rates - More People Choosing To Purchase

From a business perspective, using options like Klarna and Afterpay can lead to increased conversion rates. That means more customers are viewing your store AND buying while they are there. When customers have multiple payment options, including installment plans, they are more likely to complete their purchases instead of abandoning them due to money constraints.

Moreover, offering these payment solutions can attract new customers who prefer the flexibility and convenience they provide. It opens up a larger market and adds to the overall shopping experience, driving growth and revenue for businesses even higher. Someone who might have been looking for what you offer but thought it was maybe too much upfront, can have the option to purchase without feeling the financial burden!

5. Customer Insight

If you have been following along with us you know we like data!! These “buy now, pay later” options provide a HUGE insight into customers purchasing habits. They give businesses the ability to see what makes your customers more likely to buy. Or what makes them abandon their cart. It opens up a world of being able to tailor your business strategy towards your customers and to improve what you offer.

Businesses that embrace these “buy now, pay later” platforms stand to gain a competitive edge, increase their sales, and enhance their customer satisfaction. It's all about paving the way for sustainable growth and success in an ever evolving online business space and offering plans like Klarna and Afterpay could be something that sets your business apart.

If you are looking for help with how to create a business plan that helps you figure out if something like Klarna or Afterpay could benefit your business or you want to create BIG GROWTH in your business. Check out how we can help you and request your custom proposal today!!