Buy-now-pay-later options offer shoppers a convenient, flexible, and often low-cost way to finance purchases, but merchants may pay relatively steep transaction fees.<\/p>\n
BNPL is popular, and customers likely spend more when it is available. The downside to merchants is the cost, typically a 2% to 8% fee for BNPL transactions versus roughly 3% for payment cards alone.<\/p>\n
With fees as high as 8%, store owners must ask whether the additional sales from BNPL<\/a> are worthwhile. The short answer is probably “yes,” although reminiscing and math will make it more clear.<\/p>\n Fast and free shipping has become a staple of the ecommerce industry. For some online segments, such as fashion and toys, free shipping is a competitive requirement and an ante to participate. Yet years ago, merchants worried that shipping costs would break them<\/a>.<\/p>\n The free shipping dilemma was simple: Customers loved it. A shopper was more likely to buy if shipping was free. The challenge for merchants was ensuring the additional revenue covered the expense.<\/p>\n Today, almost no seller worries about free shipping. Merchants adjusted prices. Distribution and warehousing models became decentralized, moving products close to customers. Ecommerce thrived.<\/p>\n BNPL presents a similar problem. It boosts gross revenue but at a cost.<\/p>\nFree Shipping<\/h3>\n
BNPL Lift<\/h3>\n