Beyond Checkout – Creative Applications for BNPL

The concept of “Buy Now, Pay Later” (BNPL) has revolutionized e-commerce by allowing customers to make purchases immediately and pay in installments or at a later date. While BNPL is primarily known for online checkout, its potential extends far beyond what might initially be expected. Companies thinking beyond traditional applications can harness the potential of BNPL to develop innovative solutions and explore new markets. In this blog post, we'll spotlight creative uses of BNPL that go beyond the classic checkout process. 

1. BNPL in Healthcare: Financial Flexibility for Patients

One of the most promising applications of BNPL lies in healthcare. High costs for medical treatments can pose a financial burden for many patients. BNPL offers a solution by allowing patients to receive necessary treatments immediately and pay the costs in convenient installments.

Use Case: A dental clinic network in the USA offers its patients BNPL options for expensive dental treatments such as implants or orthodontic procedures. Patients who might otherwise forgo such treatments take advantage of installment payments to meet their dental needs. This not only leads to better patient care but also to increased revenue for the practice. 

2. BNPL for Educational Offers: Investing in the Future Made Easy

Education is one of the most valuable investments one can make, yet the associated costs often pose a barrier. BNPL can also be applied in the education sector, enabling students and professionals to spread the costs of courses, seminars, or even tuition fees over a longer period.

Example: An online education platform offering programming courses integrates BNPL as a payment option. Students can pay course fees in monthly installments instead of all at once. This flexibility results in more people taking the opportunity to enhance their skills, which in turn supports the platform's growth.

Case Study: In Australia, Open Universities Australia collaborates with BNPL providers to enable students to pay their tuition fees in installments. This has led to higher enrollment rates and allowed a broader population to pursue higher education.

3. Travel and Experiences: BNPL for Unforgettable Moments

The travel industry also holds much potential for innovative BNPL applications. Often, people dream of a grand trip or a special experience but are deterred by the high costs. BNPL can provide a solution by allowing travelers to book their dream vacation immediately and pay the cost gradually.

Example: A travel operator offers BNPL for its luxury trips. Customers can book a safari in Africa or a cruise to Antarctica immediately and pay the costs in installments. This option lowers the barrier to purchasing high-priced travel and allows the operator to reach a wider audience.

Use Case: The UK travel provider STA Travel allowed young people to finance their trips with BNPL. Students and young professionals used the opportunity to undertake large trips without having to pay the full amount upfront, leading to an increase in bookings, especially for longer and more expensive trips.

4. Retail and Wholesale Financing: BNPL for B2B Transactions

While traditionally anchored in the B2C sector, there are also intriguing applications for BNPL in B2B. Companies can use BNPL to offer their business partners more flexibility in financing orders and investments.

Example: An appliance wholesaler offers BNPL to its business customers. Retailers wishing to purchase goods in bulk can distribute the costs over a predetermined period. This eases their liquidity and allows them to place larger orders, which in turn boosts the wholesaler's revenue.

Case Study: The payment service provider Tide in the UK offers a BNPL option for small businesses needing short-term liquidity. This allows SMEs to immediately purchase urgently needed supplies or equipment without exacerbating their cash flow problems, leading to increased customer satisfaction and stronger customer loyalty.

5. BNPL for Subscriptions and Recurring Payments

Subscription models are on the rise in many industries, whether for software, streaming services, or gyms. BNPL can also find innovative applications here by allowing customers to pay annual subscriptions or memberships in installments.

Example: A gym offers BNPL for its annual memberships. Members can pay their membership fee in monthly installments instead of upfront, lowering the entry barrier for new members and leading to higher retention and a more stable member base.

Use Case: A SaaS platform for small businesses offers BNPL as a payment option for its annual subscriptions. Customers who would normally pay monthly opt for the annual payment with BNPL to save money. This leads to higher customer retention and more stable revenue for the platform.

6. BNPL for Real Estate and Renovation Projects

The real estate sector also presents interesting possibilities for BNPL, especially for renovation and refurbishment projects. High investment costs can be broken down into smaller, manageable payments with BNPL, allowing homeowners to tackle their dream projects immediately.

Example: A company offering renovation services integrates BNPL, enabling customers to start larger projects like kitchen or bathroom remodels immediately without paying the full amount upfront. This results in a higher order rate and more satisfied customers.

Case Study: In the USA, the company Hatch offers BNPL options for renovation projects. Homeowners can immediately start their renovations and pay the cost in convenient monthly installments. This flexibility has led to an increase in renovation projects, particularly in higher-end segments.

7. BNPL for Luxury Goods and Investments

Luxury goods and investments provide another creative opportunity for BNPL. High-priced items like jewelry, watches, or art pieces may seem unaffordable to many customers. However, BNPL enables financing such investments over a longer period.

Example: A jeweler offers BNPL for its exclusive jewelry pieces. Customers can immediately purchase an expensive watch or unique jewelry piece and pay the cost in installments. This makes luxury goods accessible to a broader customer base and boosts the jeweler's sales.

Use Case: An art gallery offers BNPL for the purchase of artworks. Art collectors who might otherwise hesitate to spend a large sum at once can spread the cost over several months. This has led to an increase in sales, especially among younger collectors making their first art investments.

8. Challenges and Opportunities in Creative BNPL Applications

While BNPL offers numerous creative possibilities, there are challenges companies must consider, such as risk management, integration into existing systems, and educating customers about how BNPL works.

a) Risk Management: Companies must ensure they have robust systems for assessing creditworthiness to minimize payment defaults. BNPL providers usually offer risk mitigation solutions, but it's essential that companies use these tools effectively.

b) Integration: Integrating BNPL into various business areas can be technically demanding. Companies need to ensure their systems operate smoothly and that BNPL options are seamlessly integrated into customer service and accounting.

c) Customer Education: Many customers are still not fully familiar with BNPL. Companies must provide clear and transparent information about the terms and conditions of BNPL options to avoid misunderstandings.

Solutions: To overcome these challenges, companies should collaborate closely with experienced BNPL providers offering tailored solutions for various industries. It's also advisable to conduct pilot projects to test the acceptance and effectiveness of BNPL in new application areas. 

9. The Future of BNPL: New Horizons for Innovation

The future of BNPL is promising, especially if companies are willing to think beyond the traditional checkout process. The application possibilities are nearly limitless, spanning from healthcare and education to travel.