![]() If a company wants to offer its customers a BNPL option, it has to partner with a third-party service like Klarna or Uplift (we’ll discuss them in more detail further on). A typical example is a layaway vacation or flight booked way in advance but that has to be paid in full before the departure date.Ī typical BNPL flow How buy now pay later works for businesses In retail, shoppers get their purchase immediately after the first installment is credited, but if BNPL is used to buy services (travel, insurance, education, etc.), the consumer often has to pay it off before they get the service. Actually, studies show that 42 percent of BNPL users have failed to observe their payment schedule. However, if a borrower misses a payment, a late fee is charged (usually, $5-15) – and that’s not like it happens once in a blue moon. As for commissions, such installments are often interest-free for shoppers. Since BNPL is essentially a loan, customers undergo a soft credit check. A common structure includes a total of 4 payments (that’s why BNPL is often called “ pay-in-four”) stretched over 6 weeks, but it can vary. The first one is usually duе at checkout, while others are paid on a weekly, biweekly, or monthly basis. What is buy now pay later?īuy now, pay later or BNPL is a type of short-term credit that allows shoppers to divide their purchase into multiple smaller payments. In this post, we’ll discuss the BNPL approach in the travel industry, talk about the main BNPL providers, and look at how businesses can implement the service and benefit from it. It’s pretty clear that businesses have to catch up with the trends and offer their customers the desired payment options. Once applied mostly to finance big purchases such as furniture, electronics, or vacations, today BNPL is becoming so widespread that apps actually offer to pay in 4 installments over 6 weeks when ordering snacks! ![]() These and other market stats show growing consumer interest in alternative payment methods to credit cards. Another survey, conducted by C+R Research, states that 60 percent of online shoppers have tried the BNPL service. By 2027, this number is expected to reach 900 million. The 2022 Juniper Research BNPL study calculated that there are currently around 360 million users of the “Buy Now, Pay Later” programs. Buy now pay later from ARC, Sabre, and Amadeus Reading time: 12 minutes.Uplift: free of charge for travel merchants.Fly Now Pay Later: a travel-focused app and checkout option.Affirm: issues virtual cards for installments.Klarna: the biggest industry-agnostic provider.Key BNPL companies servicing the travel industry.How buy now pay later works for businesses.
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