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‘Buy Now, Pay Later (BNPL) options are becoming increasingly popular among Australian shoppers, as more online businesses are integrating them into their checkouts. These services can boost purchase rates and appeal to new customers, but may also carry risks and fees for retailers. This article will provide an overview of three online BNPL services available. Afterpay Afterpay is currently accepted by over 4, 000 stores, and provides customers with the option to pay for a product in four fortnightly installments. These installments are charged directly to the customer’s credit or debit card, with unpaid installments incurring a $10 late fee. Customers pay the first installment up-front, after which the item is shipped. The company states on its website that it settles with retailers immediately and assumes all end-customer non-payment risks. Afterpay integrates easily with a wide variety of E-commerce back-ends, including Shopify, Commerce Vision, Infinity, IslandPacific and Futara4Retail. Costs: While Afterpay does not charge any interest or fees to customers, there is a merchant charge of 4-6% of the order value, plus 30 cents per transaction. ZipPay ZipPay works like an account, providing approved customers with a credit limit which can be spent across all partnering retailers. It offers 3 different credit limits - $250, $500, and $1000. Customers are able to choose weekly, fortnightly or monthly repayments, and have the option to make additional repayments. All purchases made over the course of the month are due by the end of the following month- giving customers 60 days to pay off their purchases without incurring any fees. ZipPays application process verifies the applicant’s identity and assesses their credit score and income stability. Funds are settled with the seller once the order has been made through the online checkout. ZipPay offers plugins for integration with E-commerce software, as well as an API for seller’s using their own custom-built E-commerce system. Costs: A $6 monthly service fee will be added to the customer’s account for each month there is an outstanding service. Merchants pay a small percentage fee per transaction, which varies according to the seller’s trading volume. PayItLater Payitlatater offers a payment plan of 4 installments over a six-week period. The company has a process to identify and approve the customers through the online checkout. Once the first repayment has been made, Payitlater will make the full payment to the retailer, after which the item is shipped to the customer. According to the company’s website, PayItLater employs sophisticated algorithms to detect fraud, and score buyers to decide whether or not to allow a purchase. It states that if the store owner has acted in good faith, they will never receive a chargeback from PayItLater. Like Afterpay, PayItLater charges a $10 late fee. PayItLater integrates with WooCommerce, Opencart and Shopify. Costs: Merchants pay a small fee and a flat fee for each transaction, though these costs are not specified on the company website. Integrating Buy Now, Pay Later Options There is definitely a lot of evidence that BNPL options have the potential to increase online sales. AfterPay customers, for example, are 34% more likely to spend, and will spend on average 25% more. Meanwhile, ZipPay has generated more than $100 million in revenue for partnering stores. While ZipPay and Afterpay are the most widely used BNPL options in Australia, newer and smaller services ar continuing to launch, each charging different fees and offering different payment schedules for customers. There are also a number of potential downsides to weigh up. For example, if the service charges a late fee, there is a chance that a customer may be dissatisfied with this and take it out on your business, rather than the BNPL service. It’s also important to understand and factor in the merchant fees charged by the service, as well as its ability to integrate with your E-commerce system.

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