BNPL is one of the fastest-growing e-commerce trends at the moment and possibly one of the best inventions to hit the lending industry in a while.
In fact, most people (56%) now prefer paying with BNPL compared to the 25% who prefer credit cards. Reasons being that it’s easier to make payments with, more flexible and convenient, clear fees and interest rates, an easy approval process, users can monitor their spending, etc.
Around 2 in 3 (67%) of consumers use BNPL services at least half of the time when online shopping, and more than one-third (35%) of consumers use BNPL most of the time. If you want to know how BNPL works, check out this article.
Why you may want to launch your BNPL app
Why do you want to adopt this model as a lender? One of the key advantages of BNPL is that you can reach borrowers at their moment of need.
For example, if you have an e-commerce business, customers can buy a specific product they need and get a loan right then and there. The same concept applies if you’re providing other types of services.
Credit powered by BNPL can also be superior because you have a deeper insight into what the customer is paying for, which provides additional data points. Or you can verify that products are actually delivered.
Read also: The risks and rewards of offering BNPL as a lender
How do you implement the BNPL system?
BNPL is an effective system, and implementing it can go either of 2 ways:
- The time-consuming and costly route where you spend time, money and engage your tech team (or hire if you don’t have one) to build your BNPL app from scratch, deploy, and deal with issues yourself.
- Or the smart lender approach where you don’t have to reinvent the wheel. As a lender, you can make the best investment for your loan business by using Lendsqr API to build your BNPL app. Here’s how to configure your BNPL app on Lendsqr:
Choose your BNPL service
First, you need to decide what kind of BNPL service you want to offer. Are you the one lending the money? Are you the one selling the goods, or are you the one providing the service to somebody else?
Let’s assume you’re either selling goods or providing services directly. The integration would be simple, as your e-commerce design site is designed in such a way that the buy now, pay later option is included at the moment of checkout.
Communicate the BNPL option upfront
Most importantly, you need to let potential customers know upfront about the credit option. For example, selling a beautiful wig listed for 150k could have a note beneath saying “or get with credit.”
This could link to a model or page explaining the buy now, pay later process. Then, when they buy and check out, that checkout would be integrated with Lendsqr.
Set up your account on Lendsqr
Then, you need to set up as a lender on Lendsqr, if you are not already. This involves configuring your loan product(s), specifying minimum and maximum loan amounts, etc.
Additionally, you’ll need to set up a separate distributor account or configure distribution settings for specific loan products. To understand this, check our API documentation for a step-by-step guide.
At checkout, they see the option to pay with your buy now, pay later set up, which is powered by Lendsqr. They put in their details, and they’ll be able to take the loan right there on the spot.
Read also: Embed BNPL into your platform without becoming a lender
Use third-party disbursement
Also, you want to configure your product to disburse in time for the sake of speed and performance, and you want to configure your product to use a third-party disbursement.
Third-party disbursement works in such a way that when loans are disbursed, the money goes to the e-commerce store, which means if you are the e-commerce owner, the money is coming to you, and if you are powering someone else’s BNPL checkout, then the money goes to them.
Build now, profit later with Lendsqr
Buy Now, Pay Later (BNPL) is exploding in popularity, and lenders can benefit greatly by offering it. BNPL gives you deeper insights into what your customer is paying for, and reaches them at the exact moment they want to borrow money.
To get started quickly and easily, skip the hassle of building a whole new app from scratch. Lendsqr loan management software provides the tools you need to build your own BNPL product fast, giving you a head start in this booming market.
