Recurring Payments Vs Buy Now Pay Later

Recurring payments vs buy now pay later, which is better for your business, and what do they both mean?

Let's begin with the basics before we start.

What are recurring payments?

Even if you aren't familiar with what recurring payments might be, you've certainly had some recurring payments. They come in many shapes and forms, and some are a bit more fun than others. Your gym membership has likely been set up as a recurring payment, a lot of your bills are a recurring payment and you might even have your toilet paper as one too. They can be an ongoing payment or they might be for a limited time.

What is buy now pay later (BNPL)?

Buy now pay later has risen to popularity in recent years, particularly through the major success stories like Afterpay. Buy now pay later means you can instantly receive your product or service without paying in full. More commonly with these services, you tend to pay in four increments making the product or service more accessible. Popular services include Afterpay, Klarna and Zip.

So how do you know which option is best for your business?

Well, there's a few things you may need to consider:

Do you need the money from your customer straight away? You're looking for a BNPL.

Is your payment on-going from your customer? Recurring payment platform is what you need.

Are you trying to avoid high fees? BNPL often have high fees, and so do some recurring payment platforms... but not Billycart.

Are you looking to help push your customers across the line to purchase? Both will help you here.

Looking for a hands-off approach? Again, both will help you here.

Do you want flexible payment agreement options? Recurring payment platforms have a lot of flexibility and options in terms of how your customers pay.

Buy Now Pay Later has truly risen to fame in the last few years with the likes of Afterpay making headlines across the world. But it isn't just Afterpay playing in this space, there's a range of Buy Now Pay Later platforms rising in popularity with even major banks getting involved. It is important to note the risks in these platforms, Buy Now Pay Later platforms are a form of debt. If you are looking at taking out a loan, your accounts for BNPL platforms may be taken into account unlike your accounts with recurring payment platforms. In addition to this, most BNPL platforms are also taking between 4-5% in merchant fees for each transaction made by a business on top of collecting high late fees from your customers.

You aren't likely to see a recurring payment platform making headlines, they've been around for quite some time now. But the recurring payment landscape is truly changing, particularly when you look at Billycart. We're using automated communication, recovering around 99% of unsuccessful payments within the first 72 hours and doing all of this at a low flat rate monthly fee for businesses.

It's important to note that each business is unique and requires different tools and software to help its success, you may even benefit from using both a BNPL platform and a recurring payments platform depending on your business offerings. If you're interested in finding out more about recurring payment platforms, join Billycart. New users get the first three months completely free.