Page 12 - Demo

12|August 2022
slippery rock gAzette
BNPL: Is it Right for You or Your Business?
You have probably seen this: You go buy some- thing online and at check-
out, a little box pops up and that says: “Pay over time with Affirm. Apply as part of checkout with just a few pieces of info. Learn more.”
It doesn’t necessarily have to say Affirm. It could say Afterpay, Zip Pay, Klarna, PayPal Credit or one of the numerous other com- panies that offer the Buy Now Pay Later convenience to busi- nesses and consumers. Giants like Walmart, Amazon, Macy’s, Pottery Barn, Expedia and Target, to name a few, have part- nered with BNPL services. By the end of 2021, 28 percent of small to midsize businesses also offered the service, and that number is expected to grow.
Buy Now Pay Later (BNPL) has become an exceedingly pop- ular option with businesses lately, and consumers as well, mostly due to the pandemic. Even though BNPL has recently come to the forefront, it has actu- ally been around awhile. Back in 2014, a financial tech company in Australia started Afterpay. As the pandemic gripped the world, people filled their idle hours by shopping. BNPL became increas- ingly popular and is now widely promoted and accepted by busi- nesses and consumers.
What it all boils down to is that BNPL works along the lines of a personal loan. Consumers want to buy something; they answer a few questions in the app to get approved. Then they can put 25 percent down and make the agreed upon payments spread out over time with usually (but not always) – no interest.
Sharon Koehler
Stone Industry Consultant
So, the question is: If the loans are interest free, how do BNPL services make any money? Like credit cards, the businesses that offer a BNPL option pay a trans- action fee. It is slightly higher than a credit card fee, usually about 4 percent although depend- ing on the company, and the transaction, it can be up to 8 per- cent. However, the average BNPL transaction is usually 23 percent higher than a cash or credit card transaction. Some BNPL compa- nies will also add a small trans- action fee to payments. Another Express has Pay It Plan It. Chase card holders may have the My Chase Plan offered to them. Citi has Flex Pay.
Different BNPL service provid- ers have different criteria. Affirm has a maximum purchase limit of $17,500 for qualified customers. Plus, they also offer a virtual card number so consumers can make purchases at non-Affirm retail- ers. Afterpay offers short term installments, usually four pay- ments. They will also set a credit limit on a consumer’s accounts, so they don’t overextend them- selves. Klarna offers a Pay in Four Plan, but they have a pay in 30 days with no interest plan and 6 to 24 months plan, with interest. PayPal Credit actually offers a line of credit on transactions over $99. If paid within six months, there is no interest charge. Sezzle also offers a 4-part payment plan spread out over six weeks, with 25 percent down at purchase, and then three more payments two weeks apart. There are many more BNPL services out there
than the ones mentioned above, just be sure to do your research since there are so many different available options.
Most of these services, with a few exceptions, only do a soft credit probe, so it doesn’t affect your credit score. However, there is a double standard when it comes to these loans. You can’t build credit with these services as most of them don’t report to the credit bureaus, BUT if you default on your payments or you are late, they can, and some do, report those defaults to the credit bureaus. So, you can’t build credit, but it can hurt your credit if you don’t make your payments as agreed.
The way these companies make money is late fees. If a consumer is late with a payment, they can be hit with penalties, late payment fees, and sometimes interest as well. Usually, if a payment is late, the consumer is blocked from tak- ing out another loan until every- thing is current.
There are two basic types of BNPL loans:
• No interest loans: The busi- ness pays a transaction fee instead of the consumer.
• Interest loans: On these trans- actions, the consumer pays inter- est on the loan, much like a credit card transaction.
Credit cards have also jumped on this BNPL bandwagon, but their loans have major differences over the standard BNPL loan. Consumers won’t get the offer before or at checkout. Instead, it will be offered as a choice on the consumer’s statement. American
In 2020 the number of US con- sumers that used BNPL services was over 24 million. This year (2022) that number is expected to grow to over 59 million, and by the end of 2024 the number of US consumers using BNPL is expected to be over 76 million. If you think BNPL is right for you and/or your business, just remem- ber to do the research and pick the service that is right for the cir- cumstances you are in. They all are a little bit different. Even if you don’t like the idea of offering this as an option to your custom- ers, 59 million consumers in the US can’t all be wrong.
Please send your thoughts on this article to Sharon Koehler at Sharonk.SRG@gmail.com .
NHardscape North America show demo, from 2019.
NSI Becomes Endorsing Partner of Hardscape North America Trade Show
atural Stone Institute and distributors to expand their (NSI) has proudly network with an important cus- announced it is now an tomer base for natural stone.
Endorsing Partner of Hardscape North America, a trade show for hardscape contractors, dealers, and landscape professionals. Held annually in Louisville, Kentucky, the HNA and Equip Expo shows co-locate and host over 20,000 hardscape and land- scape professionals. As of July 1, the current event producer, the Interlocking Concrete Pavement Institute (ICPI), will unify with the National Concrete Masonry Association (NCMA), making ICPI-NCMA the new producers of Hardscape North America.
NSI members will receive dis- counts on attendee education and/ or exhibiting at the show. For the 2022 show, the Natural Stone Institute will organize a natural stone pavilion and jury the HNA natural stone awards entries. The association’s role will be expanded in 2023 to include a larger pavilion for natural stone exhibitors and coordinating edu- cational seminars that will bet- ter equip hardscape professionals with natural stone knowledge.
Partnering with the Hardscape North America show provides NSI with an important opportu- nity to network with hardscape distributors and share informa- tion about sourcing stone from members and training sales teams through online education. NSI CEO Jim Hieb commented: “This partnership creates a great oppor- tunity for natural stone quarriers
Many of our North American quarrier members saw the suc- cess of the Natural Stone Pavilion at StonExpo this year and encour- aged us to pursue this opportu- nity. We look forward to bringing this concept to a new audience.”
ICPI Executive Director Charlie McGrath shared: “Hardscape North America has always enjoyed the presence of natural stone suppliers. The addition of NSI as an endorsing partner gives hardscape professionals direct access to the industry leaders for natural stone education and a larger supplier base from NSI’s membership. We are delighted to welcome NSI and their members to our event.”
Hardscape NA will take place October 19-21, 2022. To learn more, visit www.hardscapena. com.
ICPI-NCMA is the authority for segmental concrete products and systems, which are the best value and preferred choice for resil- ient pavement, structures, and living spaces. ICPI-NCMA pro- motes the acceptance and use of segmental concrete products and systems in the United States and Canada.
The Natural Stone Institute is a trade association representing every aspect of the natural stone industry. Learn more at www.nat- uralstoneinstitute.org.