In recent years, a new trend has emerged in the world of retail and eCommerce: Buy Now, Pay Later (BNPL) services. These innovative payment solutions have gained significant popularity among businesses and consumers alike.
In the Philippines, BNPL has witnessed rapid growth as consumers seek more flexible payment options. According to recent statistics, 44% of Filipinos have used BNPL services, and the market is expected to grow at a compound annual growth rate (CAGR) of 25.3% from 2021 to 2026.
The rise of e-commerce and the increasing demand for online shopping have contributed to the popularity of BNPL services in the country. As we delve deeper into this blog, we will explore specific BNPL providers, their offerings, and how business owners can leverage these services to thrive in the dynamic Philippine market.
Top 10 BNPL Companies in the Philippines
The growing popularity of BNPL services highlights the demand to simplify digital payment options. By partnering with BNPL companies, business owners can unlock new opportunities for growth, improve customer experiences, and mitigate financial risks.
Here are the top 10 BNPL companies that are trending in the country right now.
1. BillEase
A BNPL+ app that offers flexible installment plans, zero-interest rates, instant credit approval, and various payment methods for online and offline purchases. It also provides other financial services such as cash loans, e-wallet top-ups, mobile loads, and gaming credits.
2. TendoPay
A BNPL app that allows consumers to shop online and pay in installments over 2 to 24 months. It offers low fees, fast approval, and multiple payment options. It also provides cash loans and e-wallet top-ups.
3. Cashalo PayLater
A BNPL app that enables consumers to buy products or services from Cashalo’s partner merchants and pay in installments over 3 to 24 months. It offers low-interest rates, no processing fees, and no collateral requirement. It also provides cash loans and e-wallet top-ups.
4. Akulaku
A BNPL app that allows consumers to buy products from Akulaku’s online mall and pay in installments over 3 to 12 months. It offers zero interest rates, free shipping, and cash-on-delivery options. It also provides cash loans and e-wallet top-ups.
5. UnaPay
A BNPL app that allows consumers to buy products or services from UnaPay’s partner merchants and pay in installments over 2 to 12 weeks. It offers zero interest rates, no processing fees, and no credit card is required. It also provides cash loans and e-wallet top-ups.
6. Flexi.com.ph
A BNPL app that allows consumers to buy products or services from Flexi’s partner merchants and pay in installments over 2 to 24 weeks. It offers low-interest rates, no processing fees, and no credit card is required.
7. Plentina
This BNPL app allows consumers to buy essential goods such as groceries, medicines, and utilities from Plentina’s partner merchants and pay in installments over 2 to 4 weeks. It offers zero interest rates, no processing fees, and no credit card is required.
8. Grab PayLater
Grab users pay for their Grab services, such as rides, food delivery, groceries, and bills, in installments over the next month. It offers zero interest rates, no processing fees, and no credit card is required.
9. LazPayLater
This allows Lazada users to buy products from Lazada’s online platform and pay in installments over 3 to 24 months. It offers low-interest rates, no processing fees, and no credit card is required. It also provides cash loans and e-wallet top-ups.
10. SPayLater
Shopee users can buy products from Shopee’s online platform and pay in installments over the next month. It offers zero interest rates, no processing fees, and no credit card is required. It also provides cash loans and e-wallet top-ups.
For businesses, partnering with BNPL companies also reduces the risk of bad debt and late payments. BNPL providers assume the responsibility of collecting payments from customers, mitigating the financial risks associated with extending credit. This allows business owners to focus on their core operations and avoid the complexities of managing payment collection and credit assessment.
How to Choose the Right BNPL Company for Your E-commerce Business
Evaluating compatibility, assessing payment options and flexibility, considering customer experience and support, reviewing fees and terms, and assessing reputation and trustworthiness will help ensure a smooth integration of BNPL services into your eCommerce operations, providing enhanced convenience and flexibility to your customers.
Here are some tips for choosing the right BNPL company for your business:
- Consider the compatibility of the BNPL company with your eCommerce platform. Ensure that the BNPL service seamlessly integrates with your existing checkout process, making it convenient for customers to choose the BNPL option at the point of purchase.
- Look for a BNPL company that offers a range of payment options and flexibility to cater to your customers’ needs. Ideally, the BNPL service should allow customers to choose from different installment plans with varying durations and interest rates. The more options available, the better you can cater to a wider customer base and provide them with the flexibility they desire.
- Evaluate the BNPL company’s commitment to customer experience and support. A reliable BNPL provider should offer excellent and personalized customer service to both you, the merchant, and your customers. Look for companies that provide prompt and helpful assistance for any queries or issues that may arise during the payment process. Positive customer experiences lead to higher satisfaction and repeat business.
- Carefully review the fees and terms associated with the BNPL service. Consider the interest rates charged on installment plans and any additional fees, such as transaction fees or late payment penalties. Compare these fees and terms among different BNPL companies to ensure you choose a service that aligns with your business goals and offers competitive rates.
- Research the reputation and trustworthiness of the BNPL company in the market. Look for reviews, testimonials, or case studies from other eCommerce businesses that have used their services. A reputable BNPL company instills confidence in both you as the merchant and your customers.
Benefits of Using BNPL
BNPL services can transform the way businesses operate and interact with customers in the digital landscape.
1. Increased Sales and Conversion Rates
By offering BNPL options to customers, eCommerce businesses can significantly increase sales and conversion rates.
The availability of flexible payment plans removes financial barriers, making it easier for customers to make purchases.
This can attract a larger customer base and encourage higher-value transactions, ultimately increasing your online sales and revenue.
2. Enhanced Customer Experience
BNPL services provide a convenient and flexible payment option for customers, improving their shopping experience.
Customers can choose to pay for their purchases in installments, spreading the cost over time. This flexibility reduces the financial burden and allows customers to manage their budgets more effectively.
As a result, it enhances customer satisfaction and loyalty, increasing the likelihood of repeat purchases and positive word-of-mouth referrals.
3. Access to a Wider Customer Base
BNPL services can help eCommerce businesses reach a wider customer base, including those who may not have had the means to make immediate, full payments.
By offering installment plans, businesses can tap into a segment of customers who prefer to pay in smaller, manageable amounts.
This opens up new market opportunities and allows businesses to cater to a broader range of customers, thereby expanding their reach and potential customer base.
4. Mitigation of Payment Risks
Using a reputable BNPL provider can help eCommerce businesses mitigate the payment risks associated with extending credit to customers.
The BNPL company assumes the responsibility of collecting payments from customers, reducing the risk of bad debts or late payments for the business.
This allows eCommerce businesses to focus on their core operations and avoid the complexities of managing credit assessment and payment collection.
5. Increased Average Order Value
BNPL options often lead to an increase in the average order value (AOV) for eCommerce businesses.
By providing customers with the flexibility to pay in installments, they are more likely to make larger purchases or add more items to their cart.
This can contribute to a higher AOV, leading to improved profitability for the business.
6. Competitive Advantage
In a competitive eCommerce landscape, offering BNPL options can provide a competitive advantage.
Many customers actively seek out businesses that provide flexible payment options.
By implementing BNPL services, eCommerce businesses differentiate themselves from competitors and attract customers who prioritize financial flexibility and convenience.
7. Improved Cash Flow
For eCommerce businesses, BNPL services can help improve cash flow.
While customers enjoy the flexibility of paying in installments, businesses receive the full payment upfront from the BNPL provider.
This allows businesses to manage their cash flow more efficiently and invest in growth initiatives, inventory management, or marketing campaigns.
FAQs
How does BNPL work?
Buy Now, Pay Later (BNPL) has emerged as a popular payment option for shoppers in the digital era. The concept is simple: customers can make a purchase and defer the payment, spreading it over time in manageable installments. When a customer chooses the BNPL option at checkout, they are presented with different payment plans to select from, depending on the BNPL provider and their terms. Once the purchase is confirmed, the BNPL company pays the merchant in full and assumes the responsibility of collecting payments from the customer. For businesses, BNPL services help increase sales, improve customer satisfaction, and reduce payment risks. Overall, BNPL has revolutionized the way people shop online, providing a flexible and accessible payment solution for a seamless shopping experience.
What are the risks of BNPL?
While Buy Now, Pay Later (BNPL) services have gained popularity for their convenience, it’s important to be aware of the associated risks. One of the main risks is the potential for customers to accumulate debt. The allure of deferred payments can lead to impulsive spending and an overreliance on credit. Failure to manage BNPL repayments can result in late fees, interest charges, and negative impacts on credit scores. Additionally, businesses partnering with BNPL providers may face increased refund and chargeback risks. In cases of customer disputes or product returns, navigating refund processes and potential losses can be more complex compared to traditional payment methods. It’s essential for both customers and businesses to exercise responsible financial behavior and carefully consider their repayment capabilities and terms before engaging in BNPL services.
Final Thoughts
In the dynamic world of eCommerce, choosing the best Buy Now, Pay Later (BNPL) company is crucial for businesses looking to offer flexible payment options to their customers. While several BNPL providers are available, it’s important to consider key factors such as compatibility with your eCommerce platform, available payment options, customer experience and support, fees and terms, and the reputation of the company. By conducting thorough research and evaluating these aspects, eCommerce businesses can make an informed decision and select the BNPL company that best aligns with their needs and goals.
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