Michael Cliffe

You’ve probably already heard of Buy Now Pay Later (BNPL), given that it’s one of the fastest growing payment methods of the last decade. Since 2021, BNPL has seen over 20% annual growth in market share and is expected to be adopted by more than 900 million people by 2027. 

The majority of schools on Teachable, especially our top sellers, offer Buy Now Pay Later to their customers.

But how does BNPL even work? What are the benefits, and how can you use it to grow your business?

How Buy Now Pay Later works

BNPL providers allow customers to split a purchase into smaller payments over time instead of paying the full amount upfront.

Imagine you’ve created a bundle of courses on a topic in your area of expertise. You’re confident in its value and you choose to offer it for $400.

A prospective customer visits your checkout page and considers buying the bundle, but they can’t afford to pay the full amount right now.

If you’ve enabled BNPL as a payment method, your customer can select a BNPL provider like Afterpay or Klarna and choose a payment plan from a list of options with different installments and interest rates.

The buyer logs in or creates an account with the BNPL provider and finalizes the terms. When approved, they return to Teachable and we confirm their purchase.

The benefits for businesses

Guaranteed Earnings

Traditional payment plans delay your earnings as you wait for installments from your customers, and more than 60% of payment plan sales end without the buyer successfully completing all payments.

With Buy Now Pay Later, you receive immediate payment in full, regardless of the number of installments or the billing schedule chosen by your customer. Crucially, this also eliminates the risk of failed payments; any payment issues are between the buyer and their BNPL provider. If the buyer misses a payment or fails to complete the payment plan, you still keep your full earnings.

Higher order value

BNPL increases the buying power of your customers, allowing them to buy more of your products or consider higher price points.

Industry estimates expect a 20-40% increase in average order value (AOV) when BNPL is offered, and we see similar trends on Teachable. Comparing schools selling into the same market, on average those with Buy Now Pay Later enabled have an AOV over 60% higher than those who don’t. Schools with BNPL see an up to 15% increase in AOV after enabling the feature.

Expanded reach

Missing a preferred payment method is one of the top reasons for cart abandonment. As BNPL becomes more popular, many purchasers expect to see it as an option at checkout, and may reconsider purchasing a product which doesn’t support it.

How can your business use Buy Now Pay Later on Teachable?

Not all businesses benefit from BNPL equally, and you may need to update your strategy to make the most of it.

1. Price your product appropriately‍

We offer BNPL as a payment method for one-time purchases, and purchasers prefer to use it for higher-priced products.

Explore a pricing model where you offer either an intensive single course or a collection of related products for a single, relatively high price point.

On Teachable, you can use our bundles feature to combine different products into a single, sellable package that can be sold at a premium. That’s a great opportunity to leverage BNPL in your pricing strategy.

Alternatively, if you already have a high price point product that you offer a payment plan model for, consider offering a higher, one-time payment option to replace or supplement it. Your students will have more payment options to choose from, and you won’t have to worry about managing their payment plan. 

2. Advertise the option to use Buy Now Pay Later. 

When implementing this strategy, it’s essential that your students know they can pay in installments using a BNPL provider. 

Include messaging on your sales page that lets students know about available payment methods—and that they don’t need to pay the full price upfront if they don’t want to.

If you use a Teachable sales page or product detail page, we take care of this for you with dynamic messaging based on your pricing plan and the student location, so your student knows exactly what BNPL providers to expect, and what options they’ll have:

‍

There’s no better time than the new year to review your pricing and the payment options you offer. Try our Buy Now Pay Later on Teachable this year and see how it can help grow your business!

For more information on how to enable Buy Now Pay Later, eligibility requirements and fees, please visit our Help Center.