As more people shop online, APM providers are certain to expand even further - helping cost-conscious shoppers make the purchases they want while still the enjoying speed and convenience of a digital transaction. Sitting within the checkout page, these new services offer a fast and seamless shopping experience with no visible break in the customer journey. What's more, the majority of credit applications are approved within seconds, providing the instant feedback that has become so important to online shoppers.
Young consumers today are spoiled for choice, and unless merchants can deliver a suitably quick and flexible service these shoppers will quickly take their custom elsewhere. A slick design and smooth checkout process are not merely a "nice to have" in this environment - they are essential. With an entire generation of young shoppers beginning to consider its credit options, those merchants who offer digital-friendly flexible payment plans will be best-placed to reap the long-term benefits.
In China, where consumers have a large appetite for technology and luxury goods, flexible payment plans are particularly in demand. In 2013, Apple added an instalment payment plan to its China website - a sensible move considering that the iPhone 5 cost six weeks' pay for the average employee in China. Major players such as Apple, Huabei and Baitiao have also been joined by start-ups like Paymax, which offers instalment plans to Chinese shoppers who can't access traditional lines of credit. The move toward instalments is driven largely by the expense of traditional credit services and desire to better manage cash flow, but it's also a way for merchants to empower consumers by allowing them to purchase goods they would be otherwise unable to buy, with the added advantage of easy budgeting. The benefits to merchants are evident in the regular income they receive, along with repeat custom and improved customer loyalty. It's worth noting that as the level of internet penetration across Asia Pacific increases, the attractiveness of instalments will win over a growing proportion of young customers on the continent.
On a global scale, we've seen a growing adversity to credit as consumers are increasingly concerned about living beyond their means. To add to this, being able to compare the price of a good from multiple retailers in a matter of seconds has made young shoppers more savvy about cost in general. The option to pay by instalments, repayments or when prices are fixed in advance means shoppers are less likely - and less tempted - to overspend. In the case of companies such as Klarna that offer a less intimidating payment alternative, young consumers are attracted by the ability to make safer, simpler purchases.
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