How online fashion stores can benefit from pay later with AfterPay and Buckaroo

Because of the coronavirus crisis, many consumers are shopping online for the first time, or more often than before. When they first encounter an online store, many people prefer to pay later, notes Maurits Dekker, CCO of Buckaroo. “As an online store, offering this sends a signal of trust to your customers and builds loyalty. Because it is so convenient, some returning customers keep paying later. Others, once they know the online store, choose a prepaid method for their next purchases.” One advantage is that paying later is a fast way to check out. The payment process has fewer steps where you risk losing the customer. This raises the overall order value.

Through their joint partnership, AfterPay and Buckaroo serve between 250 and 300 active (fashion) customers, including Decathlon, Guts & Gusto, Loavies, My Jewellery, Ter Stal and Jeanscentre. For these online retailers, offering pay later helps increase conversion. AfterPay ensures the highest possible acceptance rate. Drieënhuizen: “We currently have more than six million active users in the Netherlands. We have built up a lot of data, which allows us to assess consumers quickly based on their payment behavior. For new online retailers, this means they can reach many AfterPay users right away.”

One challenge for online fashion stores is high return rates. More than forty percent of purchased items are sent back. That is costly. The Netherlands even leads Europe when it comes to returns, especially of fashion items. “We provide a simpler refund system in which refunds can be processed with a single click,” says Dekker. In the checkout process, Buckaroo also connects to any store-specific gift cards or other gift cards such as Fashioncheque. This lets consumers make a partial payment with a gift card and pay the remaining amount with another payment method.

To combat online store fraud, AfterPay and Buckaroo run fraud checks behind the scenes. Consumers must also always sign when they receive a package. “We do everything we can to prevent identity fraud. To protect both the online retailer and the consumer, the risk always lies with us,” says Drieënhuizen. All in all, there are quite a few points online fashion stores need to consider for their payment strategy to succeed. The partnership between AfterPay and Buckaroo aims to make this process run as smoothly as possible. “By joining forces, we can give fashion customers sound advice, each from our own expertise.”

Loavies is a success story. This online fashion store releases its own collections in quick succession and advertises heavily on social media. “This causes a huge spike in transactions, with many visitors in the online store at the same time.” Dekker: “Our services are a good fit for this. With flash collections like these, consumers want to be quick and able to order easily.” He calls paying later a way to reward customer loyalty. When consumers order more often and pay within the agreed payment term, they build a positive customer profile and get more and more room. “It is a hockey stick effect: a growth curve based on payment behavior.”

Drieënhuizen and Dekker are convinced that their positive approach to the payment process also gives consumers a positive association with an online store. “As partners, we are currently active in nine countries. In the coming years, we want to enter more markets so we can serve our merchants even better. We are also focusing on expanding our marketing activities, which our customers make good use of. Although we mainly associate paying later with physical products, we are also exploring other market segments, such as digital services like online ticketing. We also have a roadmap to expand our joint services with other pay-later services. We keep developing, with the goal of improving the customer journey.”