Buy Now Pay Later in France: an exploding practice

"Buy Now, Pay Later", what exactly is that?

‍

"Buy Now, Pay Later is a paperless, deferred payment system. It is a short-term financing model that allows consumers to pay for their purchases in installments at a later date. Generally, it is available at no additional cost and without interest. Used in both B2B and B2C, Buy Now, Pay Later has quickly become popular in English-speaking countries. The device is present both online on e-commerce platforms and in physical stores.

‍

BNPL : how does it work ?

‍

The operation of the BNPL is relatively simple:

‍

- At the time of payment, the customer selects the BNPL among the payment solutions available.

- After validation of the application, the applicant usually pays a first instalment.

- The payment solution provider like Pledg pays the merchant immediately.

- The customer shall make the payments according to the payment schedule.

‍

Buy now pay later in France: a payment solution with great potential

‍

According to research by Juniper Research, BNPL has managed to attract more than 360 million users worldwide by 2022. Of course, with the development of e-commerce, this number will continue to grow in the years to come. Also on a global scale, it turns out that this payment system will be able to accumulate a transaction volume of $680,000 million in 2025.

‍

It is important to know that the BNPL is more and more appreciated in France. More than 37% of French people have already used this method of payment in several installments. The Banque de France even estimates that BNPL represents 4.5 billion euros per year. This figure will continue to rise, with an increase of up to 40% by 2023. The players in this payment solution, for their part, generate more than $100 billion in revenue. Bloomberg Intelligence even predicts an increase of 40% in the coming months. In France, according to figures from the FEVAD (Federation of e-commerce and distance selling), 10 to 15% of e-commerce sites already offer payment in installments to consumers.

‍

In addition to the explosion of online purchases during the Covid-19 pandemic, the search for "good deals" for consumers, both during the sales periods and throughout the rest of the year, has also contributed to the development of deferred payment in France.

‍

Particularly appreciated by European buyers, the BNPL is now a must for B2C product and service marketplaces. In the B2B space, on the other hand, the device is a fairly new concept, but one that still has considerable potential. By 2024, the B2B market is fully capable of exceeding the $1.1 billion mark.

‍

What are the benefits for your business?

‍

Today, the BNPL is considered as a purchase facilitator. For merchants, this split payment solution has many advantages.

‍

BNPL increases the conversion rate

‍

Deferred payment can increase the conversion rate by 20-30%. Offering consumers the option of paying in 3 or 4 instalments improves the buying experience and limits potential friction at the same time.

‍

A reduction in shopping cart abandonment

‍

Simple and flexible payment solutions like BNPL have an impact on consumer decision-making. The method encourages customers to buy, which significantly reduces cart abandonment.

‍

An increase in the average basket and in sales

‍

The presence of multi-payment solutions such as BNPL increases the average basket by 30 to 50%.

‍

An impact on customer loyalty

‍

More and more consumers are choosing platforms that offer flexible and uncomplicated payment methods. Customer satisfaction increases when they have access to payment methods that suit their buying habits. As a reminder, satisfied consumers are easy to retain and have high long-term value.

‍

Reaching a specific target

‍

More and more young shoppers are turning to BNPL's multi-payment option. By offering this option on your payment page, you will especially appeal to Millennials and Generation Z.

‍

Better manage your cash flow

‍

The implementation of the BNPL allows an optimal management of the cash flow. The merchant receives the full amount of the orders directly. Generally, credit checks and collection procedures remain the responsibility of the payment solution provider. You are therefore not exposed to the risk of non-payment.

‍