If you’re an e-commerce store owner in the food and beverage industry, you might have thought about how you can help your customers with payment-related issues.
A common question when it comes to payments is whether users can use the ‘buy now, pay later’ service Afterpay to purchase groceries. In this article, we’ll give a much-needed answer to this question so that both business owners and users can use Afterpay to their advantage.
What Is Afterpay, and How Does It Work?
Afterpay is a service that allows shoppers to make purchases and pay for them in four equal installments, interest-free. This service is available at select online retailers, and it can be used for both one-time purchases and recurring payments.
When users check out with Afterpay, they’re given the option to pay in four installments. The first installment is due at the time of purchase, and the remaining three installments are automatically deducted from the user’s bank account every two weeks.
If you’re an e-commerce store owner, you can offer Afterpay as a payment option to your customers. Doing so can increase your conversion rate, as it provides a more flexible payment option for your customers. It can also boost your average order selling price as Afterpay payments are only applicable on orders over $35. Just make sure you have some method of reconciling Afterpay in Xero so all your Afterpay purchases can be properly accounted for.
Can You Buy Groceries With Afterpay?
Yes – customers can buy groceries with Afterpay. As it was mentioned before, you can add Afterpay to your Shopify store to provide this payment option to your customers. If you sell groceries on your online store, your customers will be able to buy them with Afterpay.
To add Afterpay to your Shopify store, you need to sign up for a merchant account. You’ll get a merchant ID and a secret key that you’ll need further, so note these down somewhere.
Next, log in to your Shopify store, go to Settings, and click on ‘Payments.’ Scroll down to the ‘Alternative Payments’ heading and click on ‘Choose alternative payment.’ Next, type “Afterpay” in the search bar that pops up and click on it.
You’ll now be prompted to enter your merchant ID and secret key. Once done, click on ‘Activate.’ Now, Afterpay will be listed as one of the payment options on your Shopify store. Your customers can spend a total of $150 the first time they use Afterpay, but the maximum Afterpay account limit increases over time.
It’s important to note that if your customers want to buy groceries with Afterpay at an online retailer like Coles or Woolworths, they may not be able to do so directly. This is because these stores don’t offer Afterpay as a direct method for payment. However, users can buy Woolworths or Coles gift cards through the Afterpay app — the cost of the gift card will be split into four payments like regular Afterpay payments. Users can then use this gift card at Coles or Woolworths like normal gift cards. This is an indirect way of buying groceries with Afterpay and may restrict user options to only a few retailers.
Finally, users can check out the official Afterpay page that lists all food and beverage companies offering Afterpay as a payment method. Customers can use their Afterpay Mastercard to pay at each of the retailers listed on this page if they’re shopping in-store.
What Happens When You Miss an Afterpay Payment?
If your customers have turned off automatic Afterpay payments, they might miss a payment. In this case, Afterpay will charge them a $10 penalty. If they fail to make the payment within seven days, they’ll be charged an additional $7.
Buying groceries with Afterpay can be a bit difficult because not all grocery retailers have partnered up with Afterpay. Those that have partnered up can be found on the official Afterpay website, and customers can use their Afterpay Mastercard to pay at these retailers if they’re shopping in-person. If users want to buy groceries at other retailers using Afterpay, they can do this indirectly by first buying a gift card through the Afterpay app. This gift card can then be used like any other gift card.
If you’re an e-commerce store owner operating in the food and beverage industry, make sure to add Afterpay to your Shopify store so that your customers can have one more option available when it comes to buying groceries with Afterpay.