Asaf Darash, the CEO of Regpack and holder of a Ph.D. in New Media, emphasizes the potential for service-based businesses to leverage their unique challenges related to time and space constraints to create innovative payment solutions. He suggests that the strong connection between service providers and clients can be used to implement payment structures, such as European style Buy Now Pay Later (BNPL) installment plans, that can increase revenue and financial stability. Darash highlights the trust and familiarity inherent in service provider-client relationships, citing examples like parents paying for their children’s education as a nearly guaranteed payment due to the close connection between the school and the parents.
Darash proposes customized payment plans inspired by BNPL installment options as a way to optimize payment strategies for service-based businesses. While the BNPL market in the U.S. was valued at $1.64 billion in 2022, service businesses have not fully tapped into this trend. Traditional BNPL structures, resembling loans, may struggle to secure continued payments after service delivery, as they lack a tangible product to incentivize timely payments. By offering installment plans that function as auto-bill mechanisms rather than loans, service providers can divide costs across time and seamlessly integrate them into their offerings without the need for extensive credit checks.
By enabling customers to pay in advance of service delivery, service-based businesses can secure payments, increase revenue, and improve financial stability. The familiarity between service providers and customers also reduces the risk of non-payment, making these tailored payment solutions more effective. Darash emphasizes the importance of considering variables like “just-in-time financing” and the total number of installments when offering installment plans for services, as well as factors like audience demographics, organization growth capacity, and service delivery format. By tailoring payment structures to align with service-specific characteristics, businesses can cultivate customer satisfaction, loyalty, and financial stability.
In conclusion, Darash advocates for service-based businesses to embrace customizable payment models that cater to their unique challenges and strengths. Rather than adhering to traditional eCommerce payment models, businesses in the service industry can use their close relationships with clients to create innovative payment options. By adopting European-style BNPL solutions and implementing highly customizable installment plans, service providers can transform challenges related to time and space limitations into significant advantages in the realm of payments. This approach has the potential to enhance customer loyalty, improve revenue, and propel service-based businesses ahead in a competitive market landscape.
