Buy Now Pay Later (BNPL) services have taken New Zealand by storm. There are many calls to regulate these services from a consumer point of view. But have you considered what you need to look out for as a merchant/retailer?
Merchants pay more per BNPL transaction than they would a typical credit or debit card purchase. Whereas traditional payment options might incur, say, a 1-1.5% transaction fee, BNPL commissions are in the range of around 5-6%, with some such as Afterpay also charging an additional 50c per transaction. So in short: the cost of offering BNPL services results in fees for the merchant. No interest gets passed on to the end consumer.
However, the way Kiwis are shopping and paying online shows that to be competitive, an online based business needs to offer various payment options to attract customers. NZ Post found BNPL services grew 49% in the first quarter of 2021.
It is recommended to thoroughly check the terms and conditions of the BNPL service you consider signing up for. Compare different service providers and survey your customers to choose the right and safest option for your business. Review your own terms and conditions and pricing policies to reflect the offer of BNPL services.