How do buy now pay later options help the business at all?


I mean cmon, you’re literally delaying payment for a long time. How does that benefit any business?

In: 29

Lets say I have a showroom full of merchandise
To get new merchandise in I need to move the old merch first
If I reduce the asking price, I lose profit
but If I let you take it home and make payments….
I can count those goods as sold,
and can get new fresh merch in its place in my showroom.
As long as you make more payments than my costs, Im ahead

They charge interest on the payments and they know a portion of them won’t keep up with the payments and the company can repossess the object, keep your money and resell the same object to someone else who potentially won’t be able to keep up with the payments and will get repoed as well.

Because they are guaranteed to get the payment anyways, and if you don’t pay they will get even more

Even without interest, they benefit from a sale that otherwise probably wouldn’t have happened. Even if it’s delayed, that’s not really a problem. It’s still profit that would not have been made (sometimes) otherwise.

If you charge no interest, functionally it’s no different than putting your products on sale: you will make less money (because of delay/inflation/default) but have more sales.

With interest, it’s just moving more things earlier, at the risk of buyer default, but those probably cancel out if you do your projections right.