In the world of fast and sophisticated shopping, desires and needs are growing at an accelerated pace. The Buy Now, Pay Later service has emerged as a real revolution in the way we deal with purchases. This new service enables Saudi Arabian consumers to obtain the goods and services they want immediately, with the possibility of delaying payment until a later date, thus providing the flexibility and comfort that everyone is looking for. But what is the truth about this revolutionary service? How can consumers benefit from it? So in this article, we’re going to explore the interesting details about “buy now and pay later” in Saudi Arabia and how it can change the way of shopping forever, so follow us.
What is the Buy Now, Pay Later service?
This service allows customers to purchase immediately and pay later, rather than having to pay in full at the time of purchase.
From the merchant’s point of view
This service is a useful solution to revitalize business activity and increase sales, as it facilitates the process of shopping and spending for customers, which leads to higher purchase rates and demand for products. In addition, this service gives merchants access to a broader customer base, including those who may not have the ability to pay instantly.
From the customer’s point of view
“Buy now, pay later” service is a flexible and convenient shopping solution, as they can enjoy the products they want without having to pay for them in full right away. Thus, this facilitates the shopping process and enhances the positive customer experience.
Buy now and pay later. service types available
The Shop Now and Pay Later service has become increasingly popular in recent years, as it provides customers with greater flexibility in managing their expenses and improving their financial liquidity. The following are the types of this service:
sales on credit
One of the most prominent types of this service is credit sales, which allows the customer to pay the value of purchases in one payment after a specific period of time. Therefore, this option is useful for customers who have sudden or urgent needs and do not have sufficient balance at the present time, and it also helps in improving cash flows for merchants and companies providing this service.
installment sales
The other option is installment sales, which allows the customer to divide the value of purchases into a certain number of equal monthly installments. It is worth noting that this method is useful for customers who want to manage their expenses in a more regular and organized manner, and it also helps enhance the companies’ ability to maintain a broader and continuous customer base. .
Features of this service
The “Buy Now, Pay Later” service is constantly growing in popularity among stores and customers alike. This service provides a better shopping experience for customers and brings benefits to sellers as well. The most important features can be summarized as follows:
Pre-payment
Although the “buy now, pay later” service allows customers to pay later, it also provides sellers with prepayment. Once the customer completes the purchase, the seller receives the sales value directly, which enhances his cash flow.
New clients
Providing a “buy now, pay later” service helps attract new customers to your store. Many consumers prefer this option, especially young people and customers with limited income who may not have the necessary liquidity to purchase with immediate payment, and this option also makes the shopping experience more exciting and enjoyable for them.
Good user experience
The “Buy Now, Pay Later” service provides a smooth and easy shopping experience for customers. It provides them with payment flexibility and the ability to split payments over comfortable time periods. It also reduces customers’ feelings of pressure when purchasing, which improves their overall experience.
How does “Buy Now, Pay Later” help grow a business?
The “Buy Now, Pay Later” service is one of the most important developments in the world of e-commerce, as it contributes greatly to supporting and developing businesses. It enables merchants to provide various payment methods to their customers, which facilitates the purchasing process for them and increases conversion rates. The most prominent benefits that this service provides to businesses are the following:
High customer purchasing rates
Providing a “shop now, pay later” option makes it easier for customers to purchase expensive products by distributing the cost in equal payments, which leads to increased shopping.
Avoid overstocking and continuous sales.
This service facilitates the sale of products before they are damaged or accumulated, especially seasonal products whose value increases at specific periods.
Increase business sales
Studies indicate that high prices are the main reason for leaving products in the shopping cart, so providing a “buy now, pay later” service encourages customers to complete purchases, regardless of the cost, thus increasing sales.
Attract new customers
Merchants can use buy now, pay later as a marketing tool to attract new customer segments to their online stores.
High customer lifetime value
Easy and convenient purchasing experiences are essential for customer retention, as they will return to shop again at a merchant that offers a “shop now, pay later” option.
Improving the shopping experience for customers
This service provides an ideal shopping experience for customers by providing payment methods that suit their budgets, which enhances their loyalty to the merchant.
How does this service affect customer behavior?
Regarding the impact of the “Buy Now, Pay Later” service on consumer behavior, there are several main factors that contribute to customers rushing towards this alternative method:
Low cost of financing
Buy now, pay later offers payment options at a limited cost and sometimes no fees at all, which makes them more attractive than credit cards to customers.
Reduced use of credit cards
Since the COVID-19 pandemic, the use of traditional credit cards has decreased as a result of several factors, such as rising interest rates, etc. Thus, this has provided an opportunity for alternative payment methods, such as “buy now and pay later.”
Flexibility and convenience
This service provides customers with the flexibility to make purchases at any time with immediate payment approval. Some can also pay in advance to receive the order on time, thus enhancing the purchasing experience for them.
The most popular providers of buy-now-pay later services in the Kingdom of Saudi Arabia
There are many companies that offer installment programs and support the “Shop Now and Pay Later” service in the Kingdom of Saudi Arabia. For example: Tabby, Spotii, Tamara, and PostPay, and the difference between them can be summarized as follows:
| Spotii | Tabby | Postpay | Tamara | |
| service type | Sale in installments only | Sale in installments. | Sale in installments only | Sale in installments only |
| Loan term | Three payments within two months, starting from the purchase | Installment sale: four payments within three months, starting from the purchase. Deferred sale: within 14 days from the purchase transaction, in one payment | Four payments are made every 14 days, starting with the purchase. | Three payments within two months, starting from the purchase |
| Benefits to customers | nothing | nothing | nothing | nothing |
| Sales channels | In online stores only | In branches as well as electronic stores | In online stores only | In branches and electronic stores |
| Entry Fee | It is charged on the merchant’s platform when Spotii approves the customer’s order, and payments are usually made within two business days. | It is determined by annual sales volume and sector type and includes all payment gateway fees. | Fees are determined between PostPay and the merchant according to specific criteria. | These are determined by the value and type of products in a contract agreed upon between Tamara and you, and fees are due immediately after the order is shipped, whether customers pay or not. |
| Demurrage | It is repeated every 10 days, and it is 30 riyals from the first day. | It is repeated every 14 days, and it is 10 riyals from the first day of delay. | It will be 30 riyals after 10 days. | It is repeated every 10 days, and it is 20 riyals on the first day of delay. |
The difference between Tabby and Tamara
In the world of “buy now, pay later” services, two prominent companies compete, Tabby and Tamara, both of which offer unique benefits and features to merchants and customers alike. But how does the Tabby and Tamara system work? Let him follow the most prominent differences between them to help make the decision that best suits his needs.
Loan term
Tamara
Firstly, with regard to the loan term, Tamara does not provide the deferred sale service but rather is limited to immediate payment upon purchase.
Tabby
On the other hand, Tabby offers two options to customers: a single payment within 14 days of the purchase or installments over three months. Thus, this means that Tabby provides greater flexibility to customers in managing the financing of their purchases, which reflects positively on their purchasing power.
Late payment penalty
In terms of the late payment penalty, Tabby only charges a fee of SAR 15, which is lower than Tamara’s fee of SAR 25, meaning that customers will have a greater incentive to stick to paying on time when using Tabby’s services.
Purchasing cost
Let’s take an example: If you want to buy a hair care package worth 320 riyals, the equal installments when using Tamara’s services will reach more than 100 riyals, while if you buy through Tabby, they will only exceed 80 riyals. This provides clients with more flexibility and the ability to better manage their budgets.
Buy now, pay later service, and Qoyod program
The “buy now, pay later” service has become popular among retailers, as it provides their customers with flexibility in payment. Customers can get the products they want immediately and then pay for them in installments at a later time. As for the Qoyod accounting program, it is an essential tool for any company. It helps in recording and documenting all financial and commercial transactions in an organized and accurate manner, thus providing complete transparency of financial data, which facilitates the process of understanding and analyzing them and making sound economic decisions.
As for the Buy Now and Pay Later service provided by Tabby for businesses, it relies heavily on the Qoyod accounting program in its operations, as this program is the main element that helps Tabby meet its increasing requirements, growth, and success in the accounting market.
Conclusion
In light of the rapid shift towards e-commerce in the Kingdom of Saudi Arabia, the Buy Now, Pay Later service is emerging as a vital tool to enhance marketers’ experiences and increase sales rates. This service also meets the needs of customers who prefer flexibility and ease in the payment process, which helps increase order completion rates and enhance shoppers’ loyalty to different brands. This service also contributes to facilitating the entry of small and medium-sized companies into the world of e-commerce and expanding their reach to customers. Therefore, adopting buy now and pay later solutions will play a vital role in enhancing economic growth and stimulating innovation in the e-commerce sector in the Kingdom of Saudi Arabia in the coming years.
It is worth noting that the Qoyod program provides the merchants themselves with integrated management of electronic invoice systems, as well as the point of sale system, stores, customers, etc., through a single interface, which makes it the best integrated accounting program that makes financial and commercial operations more efficient and smooth.
Knowing what the buy now, pay later service is and the role of Qoyod in managing financial operations. Try Qoyod now for free for 14 days if you are a shop or online store owner to benefit from these integrated solutions for success in today’s market.
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