Exploring new payment systems could help your business: here’s how

When you think of strategies to increase your sales, what are the first things that come to mind? Most likely a marketing campaign or introducing a new product or service.

But have you ever considered that by simply offering different payment methods to your customers, you’re automatically helping to increase your chance of a sale? Two methods by which this can be achieved are buy now, pay later (BNPL) services or gift cards.

Buy now, pay later (BNPL)

Over the past few years, the popularity of BNPL has soared in Australia. The best-known providers of BNPL in Australia are Zip, Afterpay, humm and Klarna.

BNPL is a credit-based payment method that allows retailers to get paid immediately. The customer can take the goods or services immediately then pays off the amount in regular instalments over a number of weeks or months.

This gives the customer additional access to buy in their pocket, and retailers are able to reap the benefits of having a customer that may spend more or make a purchase that may not have happened without the BNPL offer.

They’re also more likely to repurchase at a later date, and retailers are able to get their money immediately with little to no risk of fraud (at least, no more than a regular sale). On top of all this, the process is all automated so there is little paperwork and retailers retain the ability to process refunds, should they be required.

Gift cards

Gift cards allow customers to pre-pay for goods or services that you will have to provide in the future, but you get the money now. These are fantastic for a small business’s cashflow. They also provide customers with an incentive to spend money at your business and create a greater likelihood of a repeat purchase.

On top of all that, having customers carry a gift card around with your logo helps builds your brand, think of it as a business card for your company, but one that customers actually pay to buy.

In most cases, once a customer is in the store, they’ll typically end up spending more than the gift card amount. On top of all that, gift cards provide retailers with a promotional opportunity. Consider designing a promotion whereby if customers spend X amount of money, they’ll receive a gift card. You’ll find the benefits of the gift card will far outweigh the monetary value given to customers.

Remember that as of November 2019, the rules changed around gift cards. The rules now state that a gift card must have a minimum expiry date of three years from the date the card is sold. That expiry date must be listed on the card and no post-purchase fees can be added.

Of course, the majority of payment methods – including BNPL and gift cards – will come with either a service fee or some administration costs for your business. Still, they are in line with other payment costs and have the potential to bring you increased sales, greater returns, and loyal customers.

Angus Jones, Founder, Small Business Answers

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