Buy-Now-Pay-Later, Subscription Edition

Buying-now-paying-later services have been increasingly popular during the pandemic.

Many of us have shopped online because we are stuck at home or work from home, and the buy-now-pay-later approach has made it easier.

Do you need a "go-to" jacket for all those Zoom calls, or perhaps some school attire for the kids?

With purchase-now-pay-later, customers may buy everything they want now and pay later, frequently without interest.

It's similar to credit cards, but better!

Subscription businesses like Afterpay, Klarna, and Affirm have begun to provide buy-now-pay-later options in recent months.

Because the payment service pays the merchant upfront, they are beneficial for subscription organizations and merchants because they help to reduce risks like chargebacks and fraud.

They are popular with customers since they allow them to budget for greater items and spread out their payments.

Imagine being able to pay in installments for your favourite annual subscription?

Affirm

Amazon and Affirm announced their cooperation in August, allowing users to buy now and pay later on certain orders over $50.

"By collaborating with Amazon, we're providing the transparency, predictability, and affordability that Affirm provides today to the millions of customers who purchase on Amazon.com in the United States," said Eric Morse, Senior Vice President of Sales at Affirm.

Offering Affirm as an alternative to credit cards gives Amazon customers more payment options and flexibility."

Unlike other payment methods, Affirm allows users to spread payments out over 18-, 24-, and 36-month periods.

Interest might be charged by Affirm as well.

Afterpay

Afterpay followed suit shortly after Klarna.

They announced on November 24 that clients would be able to pay for subscriptions through their service.

IPSY, BoxyCharm, Savage x Fenty, and more have confirmed subscriptions with this option.

Afterpay has said that they will expand this to other locations and will make it an in-store option as well.

Customers would also be able to prepay for things and begin making installation payments after the item arrives, similar to how Klarna operated.

This gives merchants greater leeway when it comes to product introductions and allows them to more precisely build a desire for what needs to be ordered.

Deposits for special orders are also accepted to help sellers offset costs.

"By offering customers the option to pay for subscriptions with Afterpay, we're not only giving consumers the flexibility to pay for more expensive monthly costs, but we're also helping our merchant partners capture a wider consumer base through this convenient experience," Zahir Khoja, general manager of North America for Afterpay, said in a November 24, 2021 news release.

Afterpay is more than equipped to meet the demand for both customers and merchants as more retailers enter the realm of subscriptions."