The Buy Now Pay Later (BNPL) scheme and Easy Payment Plan (EPP) have become increasingly popular during the COVID-19 pandemic. Whether you are a consumer or a merchant, what should you do to take advantage of this new-fangled payment option? In this guide, I’m going to talk about ways to save your money and hopefully give you some inspiration to grow your business!
It is a point of sale loan solution a.k.a flexible payment solution that allows you to make purchases without paying the full bill in one go. The way it works is similar to how you borrow a fixed sum of money from a loan service provider, and then make monthly payments to clear off the debt. This way, you get to purchase and use the goods first while paying it off gradually. Generally, there are two types of flexible payment solution you can find in Malaysia:
This is a short-term loan solution offered by fintech companies to make your purchase more affordable instantly. This point-of-sale financing is usually interest-free and comes with a lot of rewards to gain traction of shoppers. This payment method is gaining popularity in the retail sector especially the fashion industry.
Some of the popular BNPL payment gateways in Malaysia are Atome, PayLater, and Hoolah.
While you may think the BNPL scheme may be the same as the EPP as they both serve as a purchase loan option, you will be surprised with how different they actually are. Keep reading and find out!
|Easy Payment Plan||Buy Now Pay Later|
|0% interest instalment||Yes (Usually for available for partner merchants)||Yes|
|Duration of repayment||From 3 to 36 months||From 1 to 4 months|
|Late payment fees||Yes||Yes|
|Late payment interest charges||Yes (15%-18% p.a. on the outstanding balance)||No|
|Credit limit||Usually twice your monthly income||Much lower than credit card limit|
|Who can use||Credit card holder (Applicant with income at minimum RM24,000 per annum )||Those who do not have a credit card but at least have a debit card|
|Easy Payment Plan||Buy Now Pay Later|
|How to get it||Be bank’s merchant partner or via a payment gateway provider
(A certain credit card sales benchmark depending on the bank's requirement. For example Maybank, RM30,000 per month)
|Direct contact BNPL service provider|
|Basket size||Usually works with any purchase amount of RM500 and above||Amount depending on users purchase and repayment record. Usually works with smaller purchase amount.|
|Who is suitable||For medium to large scale of offline and online businesses||For businesses selling medium price range products|
You may have noticed the impacts of the movement restrictions and lockdowns triggering the change of consumer behaviour from what and how they buy, to how they pay. Payment solutions are taking a big part from brick and mortar models to digital commerce.
Why do shoppers like instalment payment?
Apart from giving the consumers the flexibility of instalment payment, it is also seeding opportunities for businesses.
If you are a business owner, it is important to understand your customer perspectives to improve your business and succeed. As mentioned above, you now understand how flexible payment benefited your customers. But what does it mean to you?
Have a look below to find out why your business can thrive by offering a 0% instalment plan to your customer.
Now you have known what benefits that interest free instalment plan can bring to your business, how are you going to start selling using 0% instalment plan?
Instalment payment solution is not exactly an essential service that can be found in every retailer. However, the expectation of having a flexible payment solution is absolutely growing fast. So you need to ask yourself these questions before setting up a flexible payment solution:
What product category are you selling?
Who will buy from you?
Will they use instalment payment to buy from you?
Once you decided that your business is in a good place to provide this payment alternative, go to step 2.
It is critical to do a survey about the payment provider in these four dimensions: merchant rate, contract terms, user base, and point of sale integration.
Ideally, you’ll want to go with a trusted payment provider equipped with a strong and growing user base. This helps your business to attract more customers.
Once everything is set in place, it is time to spread the word. Make good use of your social media channels to impress your customer, push impulse purchase by giving them the angle to economically own that product by using instalment payment. Promoting your product or service by price tagged with a smaller and manageable bill amount is always a good choice.
Easy payment plan is a win-win solution for both consumers and businesses. It is a great way for consumers to underwrite large purchase at low cost while allowing businesses to boost sales.