To say that the way we shop has changed over the last ten years would be an understatement. But the recent uptick of brands offering split-payment services like Afterpay, Klarna, and QuadPay just further proves that consumers are really thinking differently about their purchases. As a result, retailers are having to adjust their experiences accordingly to stay relevant.
In a Zoom-conversation event hosted by The New York Times to discuss the fallout of retail during COVID-19, co-host and DealBook editor Jason Karaian pointed out that retail sales in the United States have fallen 10% since the mid-March lockdown (clothing stores, in particular, dipping 50%). This current decline makes sense, as Americans put their basic needs before shopping for a new pair of shoes, but one glance at Karaian’s sales growth chart from the last 14 years confirms that brands are going to have to try a lot harder to win over customers and dividing purchases into multiple payments, is a great place to start.
Opening doors in terms of accessibility, brands, and products that were once unattainable, are now available to shoppers of all ages, thanks to these revised payment models — especially for those that may not be able to afford an item, otherwise. However, even if you can afford to buy something without splitting up your payments, these models serve as a smart option for those that are keeping to a strict budget or want to overhaul their wardrobe. Knowing just how much you owe and when you owe it allows you to properly plan to buy yourself something nice, without impulse. Plus you won’t feel as bad if you’ve spent a little more than you intended (since you know you don’t have to pay it all right now, anyway). As necessities turn into luxuries and heritage brands like Louis Vuitton throw their hat in the ring, it’s safe to say that
By now you’ve come across one of the following options while checking out on popular sites like Target, Amazon, Zara, and ASOS. Rather than blindly test them out for yourself (or play around to see which one you’re approved for), ahead we share everything you need to know about the “big three” before getting started — including a comprehensive list of stores that are worth finally taking the plunge.
Afterpay
Arguably the easiest of the three to navigate, Afterpay made waves in 2017 for its offering of a straightforward method that allows you to “shop now. pay later” with at least three orders at a time. Once you fill up your cart at any one of its 15,000+ participating retailers, you’ll proceed to checkout as you normally would, selecting Afterpay as your payment method, at which point you’ll be redirected to its site. Upon a speedy registration and approval process, your total purchase amount will be divided into four, interest-free installments (as long as you pay on time) that are due every two weeks. Should you need to make a return, simply ship the item back to the retailer to process a refund or adjust your remaining balance accordingly if you’re doing a partial return. Easy, peasy.
Klarna
Founded in 2005, Swedish company Klarna is all about what they call “payment solutions” with three different options to choose from upon approval. First, you have interest-free installments — very similar to Afterpay’s model (which allows you to pay for items in four interest-free installments), the only difference is you’ll be charged once the item ships, not at the time you place your order. If approved, the second option allows you to choose a one-time payment of the full amount 30-days after the item has shipped. Yes, you read that right. You’ll pay for your order in full one month (or so) after it ships. The third and final option is all about financing, with an annual added interest that’s determined according to your order amount. To take advantage of the method that’s right for you, just proceed to checkout using the Klarna app and select any one of the three. All of these options are available through the free Klarna app at any store.
Most retailers that are available on Klarna can also be found on QuadPay — though you should always check the list of participating retailers to be sure. Which leads us to...
Quadpay
A pleasant combination of both, QuadPay offers the ease of Afterpay with Klarna’s extensive retailer list to match — the result is as stellar as you’d expect. To get started, just download the QuadPay app, enter your cell phone number to get set up, and if approved, simply start shopping. The major difference between QuadPay and its competitors? The in-store option. And while it doesn’t seem too exciting with the current state of the world, I suspect you’ll have a newfound appreciation for the feature as time goes on.
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