Thinking of Offering Instant Credit in Clinic?

There’s no denying that aesthetic treatments are expensive. Particularly when high quality products from reputable suppliers and administered by highly trained and experienced practitioners. Or where courses of device-based treatments, like Morpheus8 or laser hair removal are offered.

Treatment plans can run into the thousands, which can mean that, for some, aesthetic treatments might be out of their price range.

Since the early 2000s Buy Now Pay Later finance options have made it easier for people to split the payments for online and in-store purchases, at 0% interest and often without any credit checks. Increasingly, aesthetic clinics are offering easy access BNPL credit options to their patients to make paying for treatments easier and more affordable.

It sounds like a no-brainer, right? Being able to get your patient on a 6 sessions of microneedling treatment plan, where they pay 3 equal monthly payments? What’s not to love?

Thinking of offering BNPL?

Here are 6 things you need to consider first

1. Regulation is in the pipeline

Following a two-year consultation process the government published draft legislation earlier this year which plans to give the Financial conduce Authority (FCA) the power to regulate Buy Now Pay Later (BNPL) credit to consumers, in response to concerns over the risk of consumer harm of the unsecured credit market.

Most BNPL firms and products are currently totally unregulated, and borrowers do not benefit from the consumer protections lenders are required to build into other regulated lending products. This will likely lead to significant changes in the availability and cost of BNPL credit products.

2. Understand the demand

Before you get going, really understand the demand for it with YOUR patients and YOUR demographic. I’ve spoken to many practitioners who have introduced BNPL after a few patients had asked about it. They set it up, paid the fees and monthly subscriptions and very few patients have used the BNPL offering.

Sometimes, it's a squeaky wheel thing...a few people making a lot of noise.

Really understand whether the demand will be high BEFORE you go through the expense and effort of setting it up. Survey your patients. Find out how many would consider a BNPL option, or whether it’s not really a consideration for them? Ask whether they already have a particular BNPL provider they use? Or whether there’s one they feel more comfortable using.

You wouldn’t add train in a treatment because one person asked for it. The same applies when adding other products/services to your business offering.

3. Figure out the cost of each BNPL provider

The cost of BNPL finance is not paid for upfront by the consumer, and it’s not gifted by the BNPL business. BNPL providers make their money in a few ways:

1. They charge the merchant set up fees

2. They charge the merchant a monthly subscription

3. They charge the merchant payment and transaction fees

4. They charge the consumer interest where the payment is spread out over multiple months

5. They charge the consumer where payments are missed

6. They take a commission on interchange fees (the fee paid between banks for the acceptance of card-based transactions)

Create a spreadsheet to compare each provider you’re interested in: klarna, pay18r, PayPal, go cardless, clearpay, layby...there are probably more!

Factor all these costs of offering BNPL into how much it will cost you to offer easy credit to your patients.

You will need to decide whether to absorb these costs, or increase your pricing so you’re effectively passing on the cost to your customers.

4. Consider the potential brand positioning implications

No one knows your idea patient demographic like you. And this insight is crucial when deciding whether to offer BNPL finance in your clinic.

If your demographic is mass market, mid-range consumers, then offering BNPL options might be beneficial to your business and brand. It’s likely that they will use BNPL already when they purchase things online.

However, if you’re wanting to attract more affluent patients, for whom money isn’t the main driver when choosing a practitioner or treatments, at best they’ll find you offering BNPL neutral, at worst, it will cheapen your brand by association.

Before you offer BNPL payment options, ensure you have a very clear understanding of your demographic so you’re able to determine the attractiveness of those payment options to them.

5. You’ll need to market it

Like any other product or service you offer, you will need to market any BNPL products you introduce to your clinic.

You will need to use the normal channels you use to market BNPL, social, email, word of mouth.

Ensure you have printed materials available and you make the terms and conditions clear. Content relating to common FAQs - How does it work? How much does it cost? Will it affect my credit rating? How much do I have to pay back? How many instalments?  What happens if I can’t make the payments? - will help ensure that anyone who signs up to the credit agreement is fully aware of what they’re committing to.

6. Consider medical ethics

Consider the medico-ethical aspects of offering quick and easy access finance for non-essential cosmetic treatments.

There are often no credit checks done when people apply for BNPL finance. Whilst this means that they are able to access cheap credit, quickly, it also means that there is no screening for affordability. People can quickly overextend themselves financially, can be hit with late payment fees and charges if they miss payments, plus refunds and returns can be difficult.

Research by the StepChange debt charity has found that nearly half of people with a BNPL loan had trouble keeping up with household bills and credit repayments.

So there you have it, whilst offering BNPL finance to your patients in clinic can offer an affordable way for them to spread the cost of their treatments, it’s important that you consider the points above to ensure that it’s the right move for your patients and your business.