Hi Ozbarginers!
With so many different buy now, pay later type services out right now, I was wondering what type of things you look for most when choosing one. I feel like I've seen a push lately offering cashback or major discounts on new sign ups and shopping with JB etc. But curious how effective these are for people to try. Are these services like banks for people? Where people will often stay loyal to one at a time or only change for a major reason.
Any thoughts would be appreciated!
Yep definitely trying to get a feel for what people like, I got some ideas floating around and wanted some input
I don't think OZB is a great place to find out what the BNPL consumer wants.
Reason is people here are quite financially savvy and would only use BNPL if it was cheaper than not using it, i.e. $10 off. Otherwise, I'll just pay it on my 55day interest free credit card.
You're better off asking the target market- the financially irresponsible 18-25yo's and those on Centrelink long term (of course not all in the said categories are financially irresponsible).
That's a really great point I hadn't considered. Thank you for the input and I will take that onboard :)
@hbygott99: 'Where people will often stay loyal to one at a time or only change for a major reason.'
I'm not so sure Afterpay/Zip (and all these BNPL companies) are good sustainable businesses as there is very little barriers to entry.
Apple, CBA, Citi, Suncorp etc, are all introducing BNPL products.
The BNPL is going to be split into 2 segments. The traditional one where it is offered via the merchant i.e. Afterpay and the new one, were it is offered by the banks/Apple Pay/traditional financial institutions- rather than pay using your own money/credit card in full, it is deducted from your bank account/credit card in installments.
The merchants would prefer the 2nd one as it doesn't eat into their profit margin as much.
For the 1st one. The consumer will use whatever BNPL service is chosen by the merchant. They are pretty much all the same.
When there was only 1 or 2, BNPL providers could be price setters.. eventually with so many BNPL providers that Merchants can choose from, they will eventually become price takers. Merchants will choose the cheapest option for them.
Consumers don't really give a shit which BNPL provider the merchant uses as long as they can get their products and worry about paying the first installments in 2 weeks.
@JimB: Thanks for the comment Jim, you went into a lot of useful detail I hadn't considered, appreciate it!
Curious if you think a BNPL service that doesn't add charges for the business is useful. Would you as a consumer be willing to pay a few % for this?
Is there a way to mitigate both of these factors?
Any insight is appreciated!
@hbygott99: Curious if you think a BNPL service that doesn't add charges for the business is useful. Would you as a consumer be willing to pay a few % for this?
It's very useful to the merchant. Doesn't cost them anything except for sales. The loss of sales or opportunity costs is far greater than the 5% fee paid to BNPL.
As a consumer- no. Why would I pay? That's the whole point of BNPL. You get something for nothing.
I suppose you could try to charge the consumer but most likely they'll walk over the the store next door where it cost them nothing.
Either the merchant pays or I pay. I know which I prefer.
None
They have to have some kind of promotion that is ongoing and incentive like $10 off or etc.
Whichever one is giving out free money, except Klarna with their quarterly credit checks.
Speaking about credit checks, my credit score suddenly dropped 34 points even though I haven't done anything. No credit enquiries, no new applications, no defaults, no nothing….
When asked, CreditSavvy only said "Meh, it happens".
So I would seriously consider BNPL that does NOT do Credit Check favourably then those who do.
i only ever use afterpay when they have $30 off $50 spend, or some ebay promo $10 off $20 spend
wouldnt ever use it on any other basis than the above
Meaningful promotion and no credit rating hit.
I like being able to buy now……and then pay later.
Yep. Reason #1.
Are you doing market research mate?