Buy now, pay later – is more red tape good for e-commerce?
Australia has become the first country to implement industry standards for the buy now, pay later sector. What effect will it have on e-commerce? If you’re considering it, should you move ahead?
Consumer habits have shifted dramatically with Buy Now, Pay Later providers
Our Chief Digital Strategist, living for the latest news in the e-commerce and digital marketing world (and the weather report, so he can get out on his jet ski)
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The consumer-focused code consists of nine commitments that signatories make directly to the people using their products and services. They are designed to ensure safe practices and protect consumers from shady operators.
Companies such as Afterpay, Klarna and Zip will have to adhere to these new rules which include caps on the number of late payments a person can accrue, and mandatory financial checks before purchasing.
Isn’t this just more red tape?
Well, yes and no. Tighter regulations around this rapidly growing sector are expected. As consumer behaviour shifts (surged on by coronavirus pandemic), regulation is needed to weed out the providers who will drag the rest down. By putting consumers first, what feels like more government regulation might actually be a good thing.
The buy now, pay later trend is no longer that – trends come and go, this is here to stay. When used properly, it’s a fantastic way to budget and manage spending. It’s an attractive service for your customers, who are already educated in how it operates. By adding another layer of surety on top of what is existing from Afterpay or Klarna, consumers will feel safe if you’re using these providers on your e-commerce site.
Already using it? Great.
If you’re already using these providers on your site, the best news is that you don’t need to change anything. As with any other external third party provider, all of the nuts and bolts are taken care of by them. You simply need to continue to communicate to your audience about the service that they (and by extension, you) provide.
Simple trust markers on your e-commerce site can attract customers
Thinking about using ‘buy now, pay later’?
If you are considering using these providers, you need to do your homework. Is it appropriate for my product? Will my audience see the value in using it? Am I even able to use it?
Putting customers first
At the heart of it all is the need to put consumers interests first. By protecting this rapidly emerging behaviour in retail and online spending, it allows for sustainable growth. And isn’t that the goal for any successful brand?