Alternative payment methods are predicted to become more popular as we reach 2025, according to sources like CNN and Fintech Magazine. This Cyber Monday saw the highest turnout for users of Buy Now Pay Later (BNPL) services, with $991.2 million in purchases made. According to reports, consumers have been expanding their use of digital financing to fulfill broader purposes ranging from healthcare payments to professional development and training. Meanwhile, BNPL vendors have had to scramble to “mature” their services and expand their terms to meet these evolving needs.
Obvious tech trends like AI and automation are priming the buying public to expect a greater range of choices, personalization, and flexibility in their e-commerce experiences. Retailers therefore need to deliver more and better online payment solutions if they want to compete.”
FuturePay’s Tim Harris
Traditional BNPL—with its short-term loans, rigid installment plans, and prohibitive late fees—is not the only digital payment method on the block. When contemplating embedded digital payment methods, retailers should consider the more flexible option of digital revolving credit offerings such as FuturePay’s MyTab. Revolving credit platforms offer significant advantages over BNPL for both the merchant and the shopper.
Closed loop digital revolving credit solutions present a compelling alternative, allowing e-commerce vendors to enhance the customer journey while driving conversion. A recent study from the American Marketing Association confirmed that the adoption of digital payment solutions tend to both increase “purchase incidence,” or the amount of purchases a shopper makes, and encourage shoppers to make larger purchases. This is due to the payment platform’s ability to better accommodate their budgets over time.
Digital revolving credit provides customers with a reusable line of credit, allowing them to easily reengage with a merchant for repeat purchases without even having to reapply. It also allows customers to structure their own longer-term repayment schedules, which they can alter according to their needs and stretch over a longer timeframe than most short-term BNPL plans. This increased flexibility helps shoppers better manage their payments, especially multiple purchases, which can be harder to track with individual BNPL loans as opposed to a consolidated revolving account.
Digital revolving credit has benefits for the e-tailer as well. This model can be seamlessly and quickly integrated into e-commerce platforms via an API, creating a low-friction option that can boost customer loyalty while increasing the shopper’s purchasing power.
A digital revolving account solves some of the problems of BNPL, including the fact that this method rarely requires applicants to undergo a hard credit pull. In contrast, digital revolving credit works on the same financial principles as conventional credit card programs. They leverage AI-based technology to conduct near-instant credit checks—which potentially shield at-risk shoppers from overextending themselves.
As we approach the second half of the 2020s, alternative financing methods will gain more traction and become even more mainstream. To stay ahead in the evolving digital marketplace, e-commerce providers should embrace a broader range of digital financing options, including digital revolving credit, empowering their customers and positioning themselves for sustained success in the latter half of this transformative decade.
By Tim Harris, CEO, FuturePay Holdings Inc.
Alternative payment methods are predicted to become more popular as we reach 2025, according to sources like CNN and Fintech Magazine. This Cyber Monday saw the highest turnout for users of Buy Now Pay Later (BNPL) services, with $991.2 million in purchases made. According to reports, consumers have been expanding their use of digital financing to fulfill broader purposes ranging from healthcare payments to professional development and training. Meanwhile, BNPL vendors have had to scramble to “mature” their services and expand their terms to meet these evolving needs.
Obvious tech trends like AI and automation are priming the buying public to expect a greater range of choices, personalization, and flexibility in their e-commerce experiences. Retailers therefore need to deliver more and better online payment solutions if they want to compete.”
FuturePay’s Tim Harris
Traditional BNPL—with its short-term loans, rigid installment plans, and prohibitive late fees—is not the only digital payment method on the block. When contemplating embedded digital payment methods, retailers should consider the more flexible option of digital revolving credit offerings such as FuturePay’s MyTab. Revolving credit platforms offer significant advantages over BNPL for both the merchant and the shopper.
Closed loop digital revolving credit solutions present a compelling alternative, allowing e-commerce vendors to enhance the customer journey while driving conversion. A recent study from the American Marketing Association confirmed that the adoption of digital payment solutions tend to both increase “purchase incidence,” or the amount of purchases a shopper makes, and encourage shoppers to make larger purchases. This is due to the payment platform’s ability to better accommodate their budgets over time.
Digital revolving credit provides customers with a reusable line of credit, allowing them to easily reengage with a merchant for repeat purchases without even having to reapply. It also allows customers to structure their own longer-term repayment schedules, which they can alter according to their needs and stretch over a longer timeframe than most short-term BNPL plans. This increased flexibility helps shoppers better manage their payments, especially multiple purchases, which can be harder to track with individual BNPL loans as opposed to a consolidated revolving account.
Digital revolving credit has benefits for the e-tailer as well. This model can be seamlessly and quickly integrated into e-commerce platforms via an API, creating a low-friction option that can boost customer loyalty while increasing the shopper’s purchasing power.
A digital revolving account solves some of the problems of BNPL, including the fact that this method rarely requires applicants to undergo a hard credit pull. In contrast, digital revolving credit works on the same financial principles as conventional credit card programs. They leverage AI-based technology to conduct near-instant credit checks—which potentially shield at-risk shoppers from overextending themselves.
As we approach the second half of the 2020s, alternative financing methods will gain more traction and become even more mainstream. To stay ahead in the evolving digital marketplace, e-commerce providers should embrace a broader range of digital financing options, including digital revolving credit, empowering their customers and positioning themselves for sustained success in the latter half of this transformative decade.
Digital Revolving Credit: A Potentially More Responsible Financing Option than BNPLRead the article
