How to build a BNPL product?

The market size of Buy Now, Pay Later is projected to hit a record US $326.26 billion in the year 2030, as stated in the GobalNewsWire report.?

One of the hottest trends to match the never-ending shopping splurge is “Buy Now, Pay Later”, the brings friction-free options to pay off the bills over a period of a few months.??

While consumers are enticed by the BNPL's capabilities to finance almost everything they buy & split up its cost to repay the balance amount over time, e-retailers are hyper-excited to invest in BNPL development, influenced by a few leading pioneers including AfterPay, Klarna, Affirm, ZipLook, & more.?

The concept of ‘buy now & pay later was first introduced by AfterPay in 2014, which later gained attention when shopaholics flocked to opt for installment payment plans to own material possessions of any type & price, particularly when they stayed at home during pandemic times. And by then, the BNPL market has more entrants to meet the intense demands for charge-free loan payments for in-store purchases.?

The rise of Buy Now, Pay Later is?

But still, most retailers noticed that Buy Now, Pay Later may not be the first choice of buyers who’re not desirous to pay all amounts at once. Why so??

BNPL has been in existence for past years but yet it’s new to many people who rather choose to refrain from this payment option, which is in fact much more convenient, flexible, & seemingly affordable. More than 66% of buyers fear that using BNPL services is financially risky while 46% of shoppers are currently making payments through Buy Now, Pay Later option.?

Isn't it worth indulging in BNPL development?

It’s true that Buy Now, Pay Later can’t be ignored in today’s time, when people are steering away from using high-interest credit cards.?

BNPL market is expanding rapidly at a CAGR of 43.8 billion with the largest market presence in North America and the Asia-Pacific region. Now the question is why the Buy Now, Pay Later market is blooming so dramatically?

Continue reading this blog to know everything about Buy now, pay later thing along with a guide on BNPL development.

What is Buy Now, Pay Later? Intro & Definition

Buy Now, Pay Later is a kind of short-term financing that offers an interest-free payment plan for any purchase if they don't want to pay a complete upfront amount for the selected items.?

BNPL is often referred to as a point-of-sale installment loan that is getting immensely popular among online shopping enthusiasts. Here are some peculiar notes on quick briefs on? BNPL financing.

• Buy Now, Pay later financing is a point-of-sale installment loan that allows buyers to make purchases & pay for them as future installments.?
• Shoppers have to make an upfront payment for the purchase to later pay the remaining amount within a fixed date of monthly installment.??
• Buy Now, Pay Later plans are usually interest-free & they demand no additional process of approval, as in traditional credit cards.
• BNPL doesn’t affect the credit score of a user if pay-later payments are made on time as late payments degrade the credit value of the cardholder.?

Now you know how exactly ‘Buy Now, Pay Later” works, it’s time to proceed further with the process of BNPL product development.?

A Quick Guide to BNPL product development??

The rise of the online payment market is paving the way for the expansion of the BNPL product development industry. The demand for Buy now, Pay later products like Afterpay & Klarna is surging at an exponential rate & you may be in the line among those who’re planning to invest in a BNPL product.?

If BNPL product development is on your mind & want to develop one from scratch then you must mark some key features of a Buy Now, Pay Later solution.

Must-have features of a BNPL product or solution?

1. User Authentication

To provide a simple & single-step process for user authentication and verification, to ensure that it won’t be frustrating for users to wait & engage with multiple steps of logins or signups.?

2. Loan Terms?

Every online shopping platform brings special loan plans & options to gain the trust of customers.?

3. Payment Rescheduling and extension?

In case customers want to change or extend the date of repayment then they should be able to do it using a Buy Now, Pay Later option. Each user will have more control over their finances based on the individual payment offer.?

4. Account Management

To let users manage their accounts & keep a track of their payments, orders, personal information, & other process related to account management. Moreover, it boosts the user experience with features of payment automation.?

5. Instant Refunds?

Make sure that your customers have options to rethink their purchases as most buyers tend to change their minds after placing orders. The majority of popular BNPL solutions & apps like Afterpay offer a flexible way to process order cancellations, returns, & exchanges after successful payments.?

6. Online documentation

The traditional ways of getting your loan application approved turns more daunting when a customer is asked to submit papers & wait for further process. It’s time-consuming & too frustrating for buyers when they want to make last-minute purchases of a big amount.?

The new age of Buy now & pay later financing allows buyers to get all documentation done altogether online in one place. Moreover, the entire process of the loan application, approval, disbursal, & payment is digital.?

7. Payment notifications & reminders

To let your customers know that you actually care about their finances & convenience, all you need is to notify them about their upcoming payments so that they can avoid late fees & won’t be hassled while making last-minute payments before the deadline. A gentle reminder works ideally to retain customer loyalty towards your Buy Now, Pay Later services.?

8. Rewards & referrals?

Buy Now Pay Later service providers are now offering loyalty rewards to their valuable customers. Last but not the least, this feature is a part of the BNPL product development strategy that focuses on retaining existing users with reward points & cashback for every unique referral. It will cost ten times less than acquiring new ones. And a Mckinsey study also says that such referral programs are twice more profitable than paid advertising.?

Important Steps & Brilliant tricks to get started with BNPL product development?

1. Scope of project

If your product idea is inspired by popular BNPL solutions like Afterpay & Affirm then you must redefine your business requirements so that you can outline the features you want to include & understand the platform you’re building for.?

2. SDLC model

Select the right SDLC model for your BNPL product so that your development team can stay productive with the successful completion of your project. This will guide you to go ahead with the right set of technologies & tools for SDKs, PaaS, or APIs in your project.?

3. Getting a team

For building a competitive Buy Now, Pay Later product like Afterpay & Affirm, you definitely need a reliable & experienced technology partner to ensure the project’s success. There must be a team of dedicated project managers & developers who will bring the best skillset to innovate a robust BNPL product.??

4. Reaching out to the right cloud provider

BNPL product development is similar to building another Fintech software solution & hence, you need the best-suited cloud-based solution to set up your buy now pay later infrastructure to facilitate customers.?

5. Integrate an online payment solution

Like every Fintech product, developing a BNPL solution demands the integration of payment gateways and APIs or SDKs for eCommerce as an important feature of online payment.?

6. Purchase an ID verification system

Even if you’re not thinking about how a digital ID verification system can secure an app or BNPL product, you must prioritize it as being a prerequisite feature for online payment services, which is a standard & regulatory requirement for Fintech solutions.?

7. Development process

Instead of approaching a so-called developer working independently, it makes more sense to get seasoned product engineers to work on your BNPL product development project, who will use the right set of technologies & expertise to come up with the expected outcomes.?

This will also help in getting started with your project as soon as possible to shorten the product development & launch cycle.?

8. Final testing & deployment

Before launching your product, a QA testing tea will do multiple performance tests to analyze if the product is working as expected or if there are any areas for modifications including bug fixes. It eliminates the chances of bad performance, negative reviews, & uninstalls.

The recent surge of BNPL service made headlines during the COVID-19 outbreak when most buyers moved to Buy Now, Pay Later payment options to meet their shopping needs. However, it raised many concerns of payment authorities who’re reportedly reporting their complaints regarding the state of regulations that needed to be followed in BNPL commerce.?

However, still, the majority of emerging retailers are in a race to embrace BNPL to empower their customers with convenient & much affordable options to make payments in parts. In the bottom line, the idea of using Buy Now, Pay Later services is a disciplined way to pay for purchases over time for customers & is equally profitable for e-retailers to impart the best-ever customer experience with seamless & easy BNPL payments on every purchase.

Searching for the right technology partner for your Fintech product like BNPL? Get in touch with Hie HQ, a market leader collaborating with reputed brands to co-build custom solutions to step up their growth graph with business success. We're renowned for our industry-specific services with the best set of expertise for shaping ground-breaking product innovations.

We've worked with emerging startups, SMEs, as well as well-established ventures around the globe. Our startup-centric approach is one of our USPs that inspires us to craft high-end digital solutions for businesses of all sizes & interests. From product ideation to project execution, our professionals take care of each & every aspect of your progressing your project to deliver it on time & within budget.?

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