With pay-over-time transactions projected to increase by over 50% in the next 3 years, now is a great time to consider offering this flexible payment option to your customers.

For shoppers, the ability to pay over time for purchases can help them stay on budget, especially in times of financial uncertainty or for high-ticket items. But this flexible payment option is so much more than just a bonus for customers. 

For your brand, it can be a conversion tool or a customer acquisition strategy. It’s also a loyalty driver—for example, one recent study showed 60% . In short, offering pay-over-time options can be pivotal to your long-term business growth strategy.

Take a look at this overview of key benefits that pay-over-time solutions can offer you.

Increase AOV

Average order value (AOV) refers to the average amount spent each time a customer buys something from your business. Because pay-over-time solutions break purchases into budget-friendly repayments, higher-ticket items are more accessible to new and existing customers. 

In addition, customers are able to upgrade purchases and spend more overall to get exactly what they want, instead of having to settle for second best. For example, since integrating with Affirm, jewelry retailer Kristin Coffin has seen more clients opting for upgrades and customizations on their purchases, which add anywhere from $100 to $1,500 per sale. 

Increase conversion

Studies show that almost 80% of shoppers might abandon a site before completing a purchase. That results in lost opportunities to convert your browsers into buyers, and thus missed sales for your business. But pay-over-time options can help you avoid these losses.

When shoppers have the flexibility to pay over time, barriers to purchase are reduced. They’re more likely to commit to the sale—even for high-cost items. 

This is especially true during difficult times, when customers are increasingly worried about their paychecks. Tom O’Rourke, Vice President of Retail for designer jewelry retailer David Yurman, has seen evidence of this firsthand. O’Rourke said, “The pay-over-time option has given customers the ability to stretch a little bit further and still be comfortable in the purchase they’re making.”  

Increase new customer acquisition 

Bringing in new customers can be challenging and expensive. But offering pay-over-time options can give you opportunities to reach and convert a broader range of shoppers. 

If you sell high-cost, low-repeat products, growing your business is particularly tough—and even more so in times of financial uncertainty. By offering a flexible repayment option, you’re able to connect with customers who aren’t in a position to outlay the total cost of your products in one go. And they’re more likely to buy because they can make payments that suit their budget.

In addition, by partnering with a pay-over-time provider like Affirm, you can tap into our network of over 5.6M shoppers. They are looking for new brands that offer flexible payment options. By showcasing your brand’s offers—like interest-free promotions—in our marketing channels, you can engage high-intent, high-value customers who may not otherwise visit your site or store. 

Accelerate the path to purchase

With the option to pay over time, customers can afford to purchase big-ticket items straight away, and then have the ease of flexible payments. This can directly impact customer lifetime value (LTV) and repeat purchase rate. 

When Chrono24, the largest luxury watch marketplace in the world, showcased flexible payments as part of a 2019 marketing campaign, they saw 38% more sales with Affirm than they had the previous year. And fashion brand Kendra Scott saw 49% higher LTV in customers who bought with Affirm. 

Complement PLCC sales

If you’re concerned about a pay-over-time option cannibalizing your brand’s private label credit card (PLCC) sales, you can rest easy. Payments can actually complement your brand’s PLCC, helping you increase sales and drive growth.

Reduce merchant risk

The cost of fraud to e-commerce businesses is increasing year over year—in the past year alone, it has risen another 7% for U.S. merchants. 

When shoppers are approved for flexible repayments with Affirm, they’ve already had their commitment to paying over time validated. Not only that, we assume fraud liability on purchases made through our platform.

This can mean fewer fraudulent transactions for you, and less lost revenue.

Enhance customer experience

By offering a pay-over-time option to your customers, you can enhance their overall shopping experience. People who have a better shopping experience are more likely to buy from you again in the future, recommend your products to other shoppers, and spend more per visit—in fact, 84% of shoppers go out of their way to spend more money with a brand that provides great experiences.

Online mattress retailer Layla is just one brand seeing huge gains with flexible payments. Co-founder and CEO Gregg Dean said that when customers see the option for flexible payments on his site “it puts [their] minds at ease right away. They know how much they have to spend, and now they can enjoy the shopping experience.”

5 questions to ask potential pay-over-time partners

If you’re curious about offering pay-over-time options but unsure about which partner to choose, try asking these questions to find the best fit for your brand.

What e-commerce platforms are you integrated with?

Here at Affirm, we’re integrated with all of the major e-commerce platform partners—33 in total. This means adding our pay-over-time options to your site is simple and quick.

What’s your NPS?

Net Promoter Score (NPS) is used to gauge the loyalty of your customers to your brand. Affirm is proud to have an NPS of +74 as of May 2020. (For reference, anything above +70 is considered very good.)

Do you charge late fees?

We don’t charge hidden or late fees. None. Never. Not at all. The price your customers see is the price they agree to—no nasty surprises here!

How big is your user base, and how do you help drive them to my site?

At Affirm, we have a network of over 5.6M shoppers. We also have multiple ways to drive traffic to your business, including our website, mobile app, and customer communications.

What percentage of pay-over-time sales are from repeat customers?

Affirm helps increase customer lifetime value for your brand and boosts repeat purchase rate by 20% on average. 

Are you an existing Affirm partner looking to better leverage pay-over-time options? Then take a look at this checklist of best practices for boosting sales. And if you’re not, but you’re interested in partnering with Affirm, here’s how you can get started today.