The Payment Option That Buyers Love and Retailers Flock To
Understanding shifting consumer behavior is key to succeeding in today’s overly competitive market, especially online, where competitors’ offerings clamor for attention on price comparison sites or in SERPs. Forty-two percent of US buyers abandon a purchase if they can’t use their favorite payment method, and cart abandonment rates are a key metric in retail success.
Brands can avoid losing thousands of dollars in sales by investing in installment solutions, especially since 60% of buyers are attracted by “Buy Now, Pay Later” models (BNPL). It’s an option that many will have considered, but until recently, such an offer entailed retailers becoming credit brokers – not the simplest of processes.
That’s where Splitit steps into the picture to help you drive sales and increase profit. The service acts as a go-between between consumer and retailer, helping customers make purchases they want (without over-extending their finances), and retailers make the sales they need.
A Quick Glance at Splitit
Splitit was founded in 2012 by Gil Don and Alon Feit right at the beginning of the online retail revolution. The two established the company in New York, as a platform that continues to drive change and make a difference in e-commerce.
Distinctly different from most BNPL services and point-of-sale installment loans, Splitit is free of fees, applications, and credit checks. In many circumstances, even a fast digital credit check at the point of sale puts off many shoppers – and not just those with poor credit ratings. For both buyer and seller, Splitit is seamless and non-invasive of privacy.
The service ensures the buyer’s nominated payment method is valid and is good for the full cost amount and the cues up the first and ensuing payments, placing a pre-authorization hold on the following payments. Pending amounts are simply debited over an agreed timescale.
Unlike new credit arrangements, Splitit enables buyers to make purchases up to the available existing credit on their nominated card. The process is open and seamless for all parties, and the service is fully PCI-DSS compliant. That means the extra data governance hurdles retailers would usually need to jump to keep buyers’ cards on file are unnecessary: Splitit handles the card security on behalf of all its retail partners.
The statistics show…
With many retail outfits on an even playing field thanks to the democratizing effects of internet e-commerce, many buyers come to shop with a chosen payment method in mind as they browse. The Canadian Consumer Trends Report shows that millennials and Gen-Z expect diverse payment options, and by offering the simplest form of BNPL, retailers can ensure their offering is different. Splitit ensures that no customer loses out on their card points, cashback, air miles, or bonuses, yet does not charge them interest.
According to research from the Baymard Institute, 69% of buyers abandon their shopping carts, causing businesses to miss out on potentially huge sales. In the UK, for instance, a YouGov paper shows that retailers lose up to $18 billion annually.
Keeping the point-of-sale fast and convenient with no external form-fills or off-site credit checks means that retailers keep as many customers engaged and processed quickly as possible. For high-ticket items, speed of throughput is a big factor in cart abandonment especially, and the BNPL model helps ease last-minute buyer’s remorse. In fact, buyers appreciate that they can choose their payment terms, safe in the knowledge that they can make large purchases without being out-of-pocket for many months. Splitit helps manage budgeting and encourages consumers to think more positively about their buying decisions.
E-commerce retailers offering Splitit claim improved sales conversion rates of around 30%, which is congruent with the company’s research that 56% of shoppers prefer monthly installment payments. By fitting into the four-weekly cadence of card statements and reconciliation, busy Gen-Z consumers are not juggling multiple credit repayments or worrying about credit scores.
The integration of Splitit for retailers is simple, with just a few lines of code to be embedded into the e-commerce facility. Once in place, retail managers get to offer these simple payment terms to all customers – many retailers place the Splitit facility front-center on their stores as a significant sales driver. And it seems to be working!
To learn more about Splitit and how simple it is to integrate this amazing CX-focused service, reach out to a representative from the company today. There’s even a self-onboarding procedure for companies with an annual throughput of less than $2m.