Retailers can benefit from BNPL but many are wary

Two thirds of UK retailers (69%) offering BNPL options to customers report improvements in at least one area of their business sales and performance metrics as a result, according to research from RFI Global, an insights company focusing exclusively on financial services.

Why it matters

With inflation creating the biggest cost of living crisis to hit UK consumers in decades, it is in the interest of retailers to provide payment choices – already more than 17 million UK consumers have used BNPL services – with those that do being more likely to increase repeat purchasing and their bottom line.

RFI GLobal reports, however, that (63%) of retailers claim they are not interested in offering BNPL as a payment method, the most common reason given being a lack of relevance; and one third (37%) said that nothing would encourage them to begin accepting a BNPL service.

One in five also expressed concern about exposing their business to credit risk when new checks are introduced. While RFI Global points out that the BNPL provider takes the financial risk, not the retailer, it is the latter that may face reputational risks in the event things go wrong and hard-pressed consumers fail to make their payments.

Takeaways  

• Among UK retailers offering BNPL payment, the most common benefit delivered was sales conversion, with 61% of BNPL-accepting retailers indicating that it had improved their access to new-to-business customers. 
• This drove growth in revenue for more than half (52%) of BNPL-accepting retailers and growth in profits for more than a third (37%).
• New customer acquisition improved for 59% of retailers and just under half (43%) said customers were making more frequent purchases.

Sourced from RFI Global