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Buy Now Pay Later – The Technical Challenges of Moving into Physical Retail

23 Feb 2022


Buy Now Pay Later (BNPL) is a rapidly growing form of consumer credit that
differs from traditional credit cards in several important ways. Whereas credit
cards provide consumers with a revolving credit line, BNPL offers consumers
a fixed duration instalment or deferred payment option. The consumer
receives the goods or service immediately, but pays for a single transaction
over a set amount of time measured in weeks or months.

BNPL has experienced a massive resurgence in recent years, in particular,
for web purchases. Online retailers have found the BNPL payment option
to be an ideal way to upsell to customers and to increase both conversion
rates and basket sizes. New Fintech companies have been able to offer
quick and simple integrations of their BNPL payment services with the
retailers’ eCommerce sites – which in turn has enabled retailers to offer their
customers a seamless and painless route to opt for a BNPL payment.

As internet sales account for less than 20% of retail sales on a global basis,
physical stores still, however, represent by far the largest untapped revenue
opportunity for BNPL providers. Retailers are keen to secure the same upsell
benefits in-store which they have achieved with BNPL in their eCommerce
business and also to provide an identical customer experience across all sales
channels. In order to achieve this, retailers need to replicate the seamless
technical integrations in-store which they have already been able to develop
for their web sales.

Integration of BNPL with POS

Delivering a successful BNPL payment option in-store will inevitably be
dependent on how well the retailer and the BNPL provider can streamline
the customer sign-up process. If this process takes too long, it will not
only deter the customer but also create lengthy queues of exasperated

Integrating BNPL with your existing POS solution represents one of the
critical steps in achieving this streamlined process. The benefits of a full
integration between the BNPL provider and the POS solution are not only a
seamless customer experience, but also the elimination of transaction and
payment reconciliations for the retailer at end of day.

The sign-up process to capture the customer’s details and to complete the
agreement needs to be as quick and frictionless as possible. When BNPL
is fully integrated with a POS solution, this process can be simplified to the

  • After scanning the items being purchased, the cashier selects BNPL as a
    payment option on the till’s payment screen and then enters the customer’s
    mobile phone number.
  • At this point, a request is sent off to the BNPL provider containing the
    transaction value and the customer’s mobile phone number.
  • The BNPL provider, on receiving this information, builds the instalment
    options and agreement page, and then sends the link via SMS to the
    customer’s mobile phone for the customer to complete.
  • The customer clicks on the link on their phone and selects their preferred
    instalment plan, enters their name and address and payment details and
    accepts the BNPL terms and conditions to complete the agreement.
  • The BNPL provider validates the customer and payment details and sends a
    response back to the POS for the transaction to be completed.

Depending on the BNPL provider, it may also be possible to pass the
customer’s name and address details held in the POS through to the BNPL
provider, so they can pre-populate the agreement page with the customer’s
details, to make it even quicker for the customer to complete the agreement.

Ideally, the customer should only have to provide their full details the first
time they sign up with the BNPL provider so that these details can then be
used for repeat purchases to make the process even quicker.

As the availability of BNPL on-line and in-store is now seen by many
consumers as a key factor in choosing where to shop, delivering an
integration which provides a frictionless, consistent customer experience at
the till is critical.

How MWC Partners can help

With over twenty years’ experience of developing, implementing and
supporting retail payment systems for physical retail and integrating
payment software with POS solutions, MWC Partners can bridge the
technology and knowledge gap to help retailers and BNPL providers
integrate their POS and BNPL systems.

MWC Partners’ dedicated payment software integrations team have helped
many of the world’s leading payment service providers to develop solutions
for physical retail. Contact us now to discuss how we can help with your next
integration project.

Get in touch
to find out more