Last editedApr 20222 min read
Flexible payments are becoming increasingly popular in digital sales, especially among the younger generation. With gen-Z and millennials opting not to get credit cards, you can see where the appeal for flexible payments lies.
In this post, we’ll take you through some of the benefits of offering flexible payments options to your customers, so you can decide if it’s right for your business.
What are flexible payments?
Before we get into the advantages of offering it, let’s explore the meaning of the termflexible payment.
Essentially, flexible payments offer customers the option to buy now and pay later, or alternatively, pay in installments. This is similar to the way a credit card works, but it comes without the high interest rates.
The benefits of flexible payments service
Cart and checkout abandonment occur due to a number of reasons, chief among them being the total cost of items exceeding what a customer is willing to pay. Offering flexible payments is a great way to bypass this, therefore encouraging customers to complete their purchase.
For example, imagine you’re an online clothes retailer. A customer is browsing your ecommerce storefront and wants to buy a dress priced at $150. If they don’t have a credit card and aren’t getting paid until the next month, they’re highly likely to exit the page and possibly not ever return. However, if they see the option to buy now and pay later — i.e., once they’ve been paid — then they are far more likely to stick around and finish shopping with your store.
The bottom line is flexible payments can lead to much higher ecommerceconversion rates, especially among those without credit cards.
Customers are also more likely to keep adding to their basket if they see there is the option to make flexible payments. This means that, as well as buying that $150 dress, they might also opt to add some shoes and a jacket too. Knowing that they can pay in installments or at a later date once they get paid ultimately gives customers the security and confidence to fill up their cart.
Improve customer loyalty
Customers appreciate having a personalized payment plan that can meet their budget and needs. Offering a degree of flexibility with payment can both help attract new customers and keep customers coming back. It can even increase the likelihood that they’ll shop with you over your competitors who don’t offer flexible payment options.
And, while attracting new customers is great for growth, retaining the customers you do have will bring in far more revenue over the long term. It therefore pays to prioritize boosting customer loyalty rates, and offering a flexible payments service may just be the ticket to achieving that.
Note too that happy customers tend to share the good news with their friends, meaning you can see a sales boost from word-of-mouth-marketing and positive reviews.
Reach new audiences
Becoming a flexible payments provider won’t just get you in good stead with customers that come your way, it may actually be the reason customers come your way. That’s because there are tools for discovery tailored to helping people find options with flexible payments. This means that those who are actively seeking that out as a payment option are far more likely to land on your storefront.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.