After a few customers requested the ability to pay later specifically requesting services like Klarna and AfterPay, we decided to install AfterPay on our Shopify checkout page. This allowed customers to make 4 payments over several months, instead of having to pay upfront. Unfortunately, we do not have good data on the increase in conversion rate from this change as there are too many other variables that cloud the picture.
The initial deal with AfterPay was that they would get 6% plus 30 cents of every purchase. In other words, when a customer would purchase our shorts we will get 94% of the purchase -$0.30 from the customer from AfterPay and AfterPay would collect 100% of the purchase from the customer in the subsequent months.
But, after our best month ever in April and tripling April's revenue in May we looked at how much money we were funneling towards AfterPay and it was significant. Also, the cut out of our margin was significant so we decided to look for alternatives or see if AfterPay would bargain the price down.
We first emailed AfterPay and asked if because of our high revenue we were able to break into a better price tier. After receiving no response, we called three other competitors: Sezzle, Klarna, and one other. The only one who responded promptly was Sezzle. They emailed back within 2 hours later that afternoon, and I had a phone call with one of their sales managers who explained that depending on what kind of commitment we signed or didn't sign, they would bring the price down to 5% or even as low as 4.2%. Technically the products don't seem to be very different. AfterPay was slightly easier to install than Sezzle but the extra 1.8% in revenue that we get to keep is significant.
Unfortunately, we haven't tried to measure conversion rates before and after we installed Sezzle or comparing settlements as just too many other variables overcomplicate that. However, we do not feel that there really is a difference when you look at these products as commodities. Ultimately, Sezzle proved to be the best in terms of taking the lowest percentage from us as well as having better customer service and sales.
Here is our Sezzle referral code- SZOJMMJ
You will get your first month completely free so I strongly recommend you use it!