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Can Online Checkout Design Influence Whether You ‘Buy Now, Pay Later’?

Dec 12 2022 • 3 min read

Imagine that you are about to purchase a pair of shoes through an online retailer. You find a pair you really like and decide you want to buy them.

You are offered a range of different ways to pay – including debit card, credit card and ‘buy now, pay later’ – each of which is displayed in a similar way. Which option would you use to make the payment?

Now imagine the same setup. But the buy now, pay later options have colourful branding that stands out from paying by other means.

In addition, the retailer has included some in-app marketing that explains that the buy now pay later options are interest free; and the costs of paying in this way are no longer shown in terms of their total fee, but by how many each of the separate, smaller payments will be.

Which would you choose now?

Working with Citizens Advice as part of a wider programme of work on digital design, we recently sought to find out how most people would react to these different setups.

We set 2,000 participants a hypothetical online shopping task (to check out and pay for a pair of trainers). We then randomly allocated each of them to one of four realistic prototypes of an online retail checkout experience, each configured slightly differently.

The first was as close as possible to what you would typically find in an online checkout. It included the branding and in-app marketing mentioned above and became our ‘Control’ condition.

Figure 1: The user journey in the Control

The next included more information about buy now pay later terms and conditions (‘Disclosures’). And the third had the same extra information, but displayed as a pop up at the point of purchase (‘Pop Up’).

The final version (‘Combined+’) included all this extra information from the Disclosures and Pop Up conditions. But it also removed the colourful branding and in-app marketing, as shown in Figure 2, which shows the preferred payment screens.

Figure 2: Comparison of Combined+ (left) and Control (right) Conditions on payment selection screens

The Disclosure, Pop Up and Combined+ conditions helped to improve participants comprehension of what they were signing up to. Participants were more likely to correctly answer questions about the nature of the product, and whether late fees would be applied if payments were missed.

But it was only the Combined+ condition, in which the extra branding and in-app marketing had been removed, that affected the proportion of participants choosing to check out with buy now pay later products. And here, the effect was quite substantial: a 35% reduction.

Figure 3: Proportion of participants choosing BNPL

This finding – that the layout, configuration, branding, and prominence of buttons in apps affects our decisions – won’t be a surprise to designers or behavioural scientists. But it is only through the testing and trialling of these prototypes that we are able to tease out the effects of different design elements upon comprehension and behaviour.

So the next time you are checking out an online purchase, have a look at how the platform is configured. And ask yourself whether you would still be purchasing that item with the same payment option if the platform were designed differently.

The work was carried out with Paul Adams. And commissioned by Citizens Advice.

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