Top Reasons Why E-Commerce Merchants Benefit by Offering Extended Credit to Customers

If you are operating an online business, you will no doubt have made it convenient for customers by offering multiple payment options. In a scenario when more customers than ever are cautious of paying for their expenses without incurring additional charges. A “buy now, pay later” option is now viewed by customers intending to make big-ticket purchases as essential, not just a convenience. This is especially true of the Millennials. Some of the most important reasons why you should offer extended credit on your shopping site:

Preference for Buying Now and Paying Later by Younger Generations 

The younger generation is more insistent on obtaining instant gratification of their needs and wants without waiting to save up and buy. By offering a buy now, pay later option on your e-commerce platform, you can make it easier for them to afford large purchases without having to use a credit card and its associated charges. If you look closely, you will find that this option is nothing more than an evolution of the Fingerhut coupons that were popular in the 1970s. Customers purchasing from the catalog would get a book of coupons with the monthly payment amount mentioned in them. Every month customers would send back one coupon to the company along with their payment.

Good Option for Customers without Credit Cards

Even though credit cards are popular, by restricting your payment options to just credit cards, you would also limit your potential sales. Additionally, an increasing number of customers, especially the Millennials are becoming wary of increasing their credit card balances. A buy now, pay later option can be a very compelling attraction for young customers for shopping online. Online merchants can also significantly increase the number of their potential customers because even today many people do not have or use their credit cards.

Powerful Driver of Sales

Online businesses are familiar with customers balking at the amount at the time of check out and abandoning their shopping carts. By offering a buy now, pay later option, merchants can drive sales significantly. According to a study by PayPal, retailers were able to increase the order values by 15% by offering financing. According to a Forbes report, nearly half of customers believed that they spend 10-40% or even more using the buy now and pay later plan in comparison to a credit card.

Improves User Experience

Contemporary customers have a wide choice of retailers and they are most likely to favor the ones that provide a delightful user experience, including most importantly, a seamless checkout. All customers nowadays expect simple ways to make the payment and love an option to buy now and pay later.


As an online merchant focused on driving sales and building customer loyalty, you should offer multiple ways for customers to make payments. While credit cards remain a popular option, offering a buy now and pay later payment option that is simple for customers to negotiate can significantly add greater convenience and affordability leading to more sales and customer loyalty. This kind of flexibility and convenience appeals to all customers who prefer not to use their credit cards yet enjoy extended credit.

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