KCAL News Kristine Lazar discusses how the “Buy now, pay later” option online could hurt your finances in the long run.

FREE pdf with questions that will help you find the best BNPL provider for your business: https://bit.ly/3wUTuSs

The buy now, pay later market is expected to double by 2024, which will represent more than $100 billion in sales. In this video, we’ll go over the benefits and risks of partnering with a BNPL service as a merchant. At the end, I’ll walk you through the questions that will help you find the best provider for your business and you’ll be able to decide if ‘buy now, pay later’ is a good solution for your eCommerce business. Watch this video to find out how you can increase sales, how to increase AOV by using one of the ‘buy now, pay later’ services.

Timestamps:
00:00 Intro
01:01 What is BNPL
02:20 The Benefits of Using BNPL
04:00 Potential Risks of Using BNPL
06:57 Choosing the Right BNPL Provider

�� More videos on eCommerce:
• Selling NFTs on Shopify | The future of e-commerce in Web 3.0 → https://youtu.be/RZUuCZ2gOs0
• 10 things you NEED to know before you start an eCommerce brand → https://youtu.be/f4iJsL3QJuc
• 6 profitable eCommerce business ideas for 2022 → https://youtu.be/ZLMPVQVSByk

☎️ Stay connected:
• Luck & Co Agency: https://luckandco.agency
• Kasey’s LinkedIn: https://www.linkedin.com/in/kaseyluck/detail/recent-activity/shares/

#kaseyluck #ecommerce #buynowpaylater

According to a survey of over 2,000 Americans, 37% said they have used a Buy Now, Pay Later service as of October 2020. Over the course of the 2020 recession, BNPL payment options skyrocketed. Over 74% of survey respondents said they used BNPL financing for the first time since the pandemic began. But how does this work exactly?

Much like old school layaway programs, customers make a series of small payments until their purchase is fully paid for… But the major difference is they get the items delivered to their home even if they didn’t put any money down! WHAT? All they have to do is sign an agreement to make a series of smaller payments in the future that will come directly out of their checking account which they have to link up with a BNPL company such as affirm or after pay.

With millions of people facing unemployment as a result of covid, hundreds of stores are adding this option so that shoppers have more choices for how to pay for stuff. Some stores won’t have this option because it’s expensive for business owners. Businesses have to pay between 3-6% of the transaction price in order to offer this option to their customers.

So what’s the difference between paying with a debit or credit card or using BNPL loans?

Using a debit card, you pay 100% of the price with the funds in your checking account.

With a credit card, if you don’t pay in full by the end of the month, you will be charged compounding interest and possibly late fees. The longer it takes to pay the balance the more fees you get charged.

With BNPL loans customers KNOW UP FRONT how much they will pay at the end of the loan term. On top of that, the application process does not require a hard credit inquiry so it does not lower your credit score.

But don’t get it twisted, BNPL loans CAN HURT YOUR CREDIT SCORE if you miss a payment or do not have sufficient funds in your checking account – if this happens, you’re in double trouble because a negative remark will be reported to your credit report which will lower your credit score AND you’ll be charged a late fee of anywhere between 8-35$.

A few tips for those who might consider using BNPL loans:

1. Don’t get carried away – Data from 2020, shows that BNPL users typically spend on discretionary items like electronics (46.8%), apparel (41.7%), beauty products (37%), and travel (21.3%). If it isn’t something you can afford to buy, then ask yourself if it’s really necessary to borrow money in order to buy it? In other words is it really a need or just a want? Instead of BNPL, you can save up and buy it yourself.

2. Pay careful attention to your bank account and budget. If you forget that a payment is coming up and you don’t have enough in the bank, you will likely end up being charged bank fees for over drafting or having insufficient funds. In an attempt to save money now, you could end up paying more later.

Explore the evolution and future of BNPL, with Mark Thomas, Equifax Head of Financial Services, and Alberto Fernandez, Head of Insights at Latitude Financial Services. Your questions answered on
– Why has BNPL exploded in the recent past?
– What trends and challenges might come up as the market matures more in the near future?
– What might be ways to open up the pathway to profitability in the channel? – – What role BNPL plays for merchants and how will it develop in the future
– How does financial literacy play in this segment and how do you lend responsibly?

Visit our website: www.equifax.com.au

This video was recorded and filmed in May 2022.

This information does not constitute legal, accounting or other professional financial advice. The information may change, and Equifax does not guarantee its currency or accuracy. To the extent permitted by law, Equifax specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.