Karl Hodson: Flexible in-store payments will revolutionise spending
Flexible instore payment options are currently an up-and-coming feature, much anticipated by stores around the UK. While buy now pay later (BNPL) options are offered as standard when shopping online, this option is rare when shopping instore, until now.
The likes of Klarna instore services mean that shoppers can now access flexible payment options instore, through the multipurpose Klarna app. Karl Hodson of UK Business Finance, a commercial finance expert, explains how the BNPL market is changing the retail landscape and transforming shopping habits.
The introduction of instore BNPL services
The payment capabilities offered by online retailers have now been extended into physical stores, as seen with Klarna instore services. Customers can use a one-time digital card through the Klarna app to make payment, or use a QR code which initiates payment instructions through the app. This revolutionises the buy now pay later market and the way customers judge purchasing decisions thanks to newfound instore payment flexibility.
Businesses can benefit from Klarna instore as it provides seamless, app-driven BNPL services, as opposed to having to open a traditional credit account which is often the next best solution retailers can offer instore.
Here are some of the benefits of using Klarna instore for businesses:
- Flexible payment options
- Boost conversion
- Boost average order value (AOV)
- Drive footfall
- Attract new customers
- Get more insights
Klarna instore lets customers spread payments when making instore purchases, which is the norm when shopping online, but often rare when shopping instore. While instore payment methods strive to match up to that of online, this could revive interest in in-person store shopping.
UK footfall for all destinations was down 14.2% in 2022 on 2019, according to retail analysts, Springboard. Fuelled by hybrid working and online shopping, it’s unsurprising that footfall numbers plummeted. The phenomenon of instore flexible payments attempts to lure customers back to the high street as stores raise the benchmarks in terms of payment capabilities.
A survey conducted by Statista on global online shopping trends by generations found that globally, a higher share of millennials and Gen Z shoppers were open to online shopping when compared to baby boomers in 2021. Instore flexible payments attempt to undo this and drive Gen Z shoppers and millennials through the shop doors as 75% of Klarna in-store users are either Millennials or Gen Z.
Klarna also claims that their instore payment facility generates 80% higher AOV for retailers when customers pay with Klarna as 78% of shoppers say it’s important for them to have a choice in payment methods.
The instore payment option can be used through an integration-free digital card. Customers can create a single-use digital card, tap to purchase, and then manage payments through the app. Alternatively, there’s a speedy integrated QR code solution where the customer or store generates a QR code that’s scanned at the till.
Clearpay provides a similar instore option so customers can spread payments over 4 instalments.
Flexibility, without limitations
Shopping online provides customers with limitless payment options, such as Klarna, Clearpay, and Laybuy so if affordability is ever out of the question, these buy now pay later options make it possible. Effectively short-term loans, buy now pay later options are extremely easy to access which makes way for the question – does it increase the risk of debt?
The BNPL industry is en route to being regulated, after which, tougher affordability checks are likely to be enforced as it revolutionises the retail industry.