The Journey Of Building a Seamless Buy Now, Pay Later Application with Us

(image courtesy: Sanjay Kidecha )

Buy Now, Pay Later! The most lucrative offer which one can’t just ignore. This one is breaking the records by enticing customers to make purchases without worrying about the expense at the “moment’. Well, it seems like it has struck the right chords of the changing needs of the consumers. This model has taken over the FinTech space and there is no coming back. If you are an entrepreneur looking ahead to develop a Buy Now, Pay Later (BNPL) application, this blog is for you! In this blog we will be sharing all the insights of the BNPL model, its working and business models that you can use to develop an application. So here we begin.

To start with,

What is BNPL? And, How does it work?

Buy Now, Pay Later is a convenient way of shopping. It allows consumers to purchase things whose amount they can’t afford at the moment. BNPL facilitates consumers to pay installments over a specific period of time. As a result, even the consumers who can not afford the upfront payment, now have the access to buy luxury goods and services.

No matter how lucrative this offer is for consumers, businesses find it equally beneficial. It helps them increase their sales and allows consumers to stick by the brand for a longer period. This is a quite flexible financing option and has become a hot favorite amongst consumers.

How does BNPL work?

Just as easy as it sounds, consumers buy items from the platform(application) and choose to pay the amount in installments. The platform pays the amount to the vendor and completes the procurement of the goods/items. Once the order is received, the vendor is responsible to align their services as per the BNPL model. The vendor pays the service provider as per the pre-decided installments, and if failed/missed to pay on time is entitled to pay with interest.

Citing the top BNPL application as an example, Klarna, let us help you understand the process of working.

• Customers make a purchase online, they select a payment option of Klarna during the checkout.
• On making this selection, Klarna is responsible to pay the full amount to the merchant.
• Klarna allows four interest-free installments which means customers can pay in four different installments in a defined period without being charged the interest.
• This way, customers have a grace and quite a longer period to cover the expenses. However, this period depends on the terms and conditions of the service provider application.
• Incase of any failure from the customer’s side, the service provider Klarna is responsible for collecting the full amount.

This working model sounds like a complete solution for customers who are shopping enthusiasts, but also worry about their pocket’s expense.

Which industries can you target by developing a Buy Now, Pay Later Solution?

The unprecedented growth this industry has seen after the pandemic is noteworthy. Every industry is looking forward to integrating this model without fear of being disappointed. Here are a few industries that you can target for the BNPL solution.

• Fashion;
• eCommerce;
• Home Decor;
• Travel;
• Health and Wellness;
• Automobile;
• Education

All of these industries can serve at its best purpose by allowing customers to make purchases and thereby increasing the sales. It helps in increasing consumer conversion rate and reduces cart abandonment at the checkouts.

Well, now that you know how BNPL functions and can help you target markets, here are a few Do’s and Don’ts that you should know before developing a BNPL app like Klarna.

Developing a successful mobile app for your business requires careful consideration of various factors. While developing a mobile app can be a great way to increase brand awareness and boost sales, it is important to keep in mind the dos and don’ts of mobile app development.

Dos:

1. Identify the purpose of your app: Before developing your app, clearly define the purpose of your app and what problem it solves for your customers.
2. User experience: A good app should be easy to use, intuitive and have a clean interface.
3. Personalization: Use data analytics and machine learning to personalize the app experience for individual users.
4. Regular updates: Ensure that your app is regularly updated with new features and improvements to enhance the user experience.
5. Integration: Ensure that your app is integrated with other software, such as your website, social media accounts, and other relevant platforms.

Don’ts:

1. Compromising on security: Your app should be secure and protect user data. Security breaches can damage your reputation and put users at risk.
2. Inconsistent updates: Failing to update your app regularly can cause it to become outdated, making it less user-friendly.
3. Ignoring feedback: Listen to user feedback and make necessary improvements to your app. Ignoring user feedback can lead to a decline in user engagement.
4. Overcomplicating: Keep the app design simple and avoid overloading it with features that may confuse or overwhelm users.
5. Neglecting testing: Ensure that your app is thoroughly tested before launching it to avoid glitches and bugs that could affect the user experience.
6. By following these dos and don’ts of mobile app development, you can create an app that meets the needs of your users, boosts engagement, and helps grow your business.

Moving forward, let us look at the list of general features that you should include in your BNPL solution.

BNPL app development is not easy, and not every mobile app development company can help you make it. But we promise you that Kody Technolab will serve in your best interest. Here are a few general features that can help you make a successful BNPL application.

• Quick and easy signup process: Users can sign up for the app in just a few minutes by providing basic information such as their name, email address, and phone number.
• Payment scheduling: Users can choose their preferred payment schedule, which can range from weekly to monthly, depending on their financial situation.
• Automated payments: The app can automatically deduct payments from the user’s linked bank account or credit card, making it convenient for users to pay their installments.
• Personalized offers: BNPL apps use data analytics to personalize payment plans and offers for each individual user, based on their purchase history and spending habits.
• Transaction tracking: The app allows users to track their transaction history, view upcoming payments, and manage their payment plan.
• Payment reminders: Users can receive reminders before their payments are due, ensuring that they don’t miss a payment and incur late fees.
• Customer support: BNPL apps typically offer customer support through various channels, such as email, phone, and live chat.
• Interest and Fee calculator: The app should be integrated with tools that help consumers to calculate interest and fees for the said purchases.
• Credit score monitoring: Users should be allowed to check their credit score for future purchases.
• Loyalty Programs: Loyalty Programs are best to integrate as it enforces users to stick to the brand.
• Loan terms management: Allows users to decide on load payment methods be it pay in 4 months, pay in 30 months etc.
• BNPL analytics and reporting: The application should generate timely reports for admin and users to keep a check on the transactions made.
• Moving forward to the next segment,

How much does it cost to build a Buy Now, Pay Later application?

This is a very tricky question which doesn’t have a direct answer. Yes, there are many factors that affect the final cost of app development. The price varies significantly depending on various factors such as complexity, features, design, development platform, team size requirement etc.

However, we can break down the cost into three main categories: design, development, and maintenance.

Design:

The design cost of a BNPL application is highly subjective as it depends on the design complexity, graphics, and user experience. The cost will vary depending on whether you hire a freelance designer or a design agency. On average, the design cost can range from $10,000 to $25,000.

Development:

The development cost of a BNPL application can vary depending on the features, platform, and complexity. A simple BNPL application with basic features can cost around $25,000 to $50,000. However, a more complex application with advanced features such as AI-based fraud detection, integration with third-party payment gateways, and scalability can cost upwards of $100,000. The development cost will also vary depending on the location of the development team.

Maintenance:

Maintaining a BNPL application is an ongoing cost. It includes server maintenance, updates, bug fixes, and customer support. The maintenance cost can range from $5,000 to $10,000 per month depending on the complexity of the application.

How to make money using the BNPL solution?

There are various monetization strategies that you can adopt for your Buy Now Pay Later (BNPL) application to generate revenue. Some of the potential monetization modules that you can consider include charging collaboration fees, providing membership plans, charging late fees, and charging a commission fee.

One way to generate revenue is by charging collaboration fees from multiple brands that partner with your BNPL application. You can develop a separate module for merchants to seamlessly follow the collaboration process and make payments without any hassle. Another way to generate revenue is by providing membership plans on a yearly or quarterly basis, allowing users to leverage additional flexibility on repayment options and earn reward points whenever they pay installments before the due date.

You can also charge a penalty fee in case customers fail to pay the installments on the due dates. This will help you generate revenue while also encouraging customers to make timely payments. Additionally, you can charge a commission fee from merchants for every sale or transaction, allowing you to earn a good amount of revenue.

The cost of building a BNPL mobile application can vary depending on various factors such as design, development, features, and maintenance. On average, the cost can range from $50,000 to $200,000. However, it is best to consult with a professional development team to get an accurate estimate for your project. By adopting a smart monetization strategy and developing a high-quality BNPL application, you can generate revenue while providing a valuable service to customers.

Final Thoughts on how to build a BNPL mobile application!

I hope this article has provided valuable insights into the world of buy now, pay later technology. Here are the key takeaways to keep in mind:

1. Understand your target audience: The first step in developing a successful buy now, pay later app is to understand your target audience’s needs and preferences.
2. Choose a trusted payment provider: Research different payment providers to find the most suitable solution for your business. A well-known BNPL provider can attract more customers to your store and showcase your brand to a wider audience.
3. Announce your new payment option: Once you have implemented a buy now, pay later option, it’s important to make an official announcement to attract your customers’ attention and promote your new payment method.
4. Consider outsourcing development: Outsourcing your development project to a company based in Eastern Europe can be a cost-effective way to access top talent and expertise in mobile app and web development.
5. Contact Kody Technolab for a free consultation: If you’re considering implementing a buy now, pay later option for your business or have any questions about this topic, contact us for a free consultation. Their team of experts can help you navigate the complex world of BNPL technology and find the right solution for your business.
6. Expanding your business online can be a daunting task, but with the right tools and strategies, it can be a highly rewarding experience. By implementing a buy now, pay later option, you can attract more customers to your store and provide a valuable service to your target audience. Keep these key takeaways in mind as you navigate the world of BNPL technology, and don’t hesitate to reach out to Kody Technolab for guidance and support along the way.