Brian Shniderman is the CEO of Opy USA and the global chief strategy officer at Openpay.Read Articles Written by Brian Shniderman
Adopting a pet is a beautiful experience, offering families a beloved companion full of unconditional love, loyalty and protection. However, while the excitement of a new furry friend continues long after the adoption is finalized, ownership comes with tremendous responsibilities, some of which can leave families, and your patients, struggling financially.
As you’re aware, the first year as a pet owner is often the most expensive. From spaying or neutering to the necessary vaccines, first-year veterinary expenses can cost thousands of dollars, blindsiding pet owners who might not be aware of the expenses a pet accrues. And it doesn’t end after the first year. The American Society for the Prevention of Cruelty to Animals calculates that pet owners will spend anywhere from $700 to $1,100 a year on standard veterinary expenses, not factoring in emergency surgeries or procedures.
Although both the expected and unexpected costs might seem unsettling, there is a solution that veterinarians can provide to ensure that all pets are adequately taken care of and their owners don’t fall into substantial debt. It’s an installment payment plan.
At veterinary practices that offer installment loans, clients don’t have to pay in full at the time of service. Instead, they split the invoice into monthly proportions and make smaller payments over time. Opting to utilize installment loans for meaningful purchases is a tremendously valuable budgeting tactic, especially when a client faces unexpected veterinary bills. Installment lending has been around for a long time; consumers typically use such loans to pay for mortgages or cars.
Today, however, a new variation has been making waves in the United States: buy now, pay later (BNPL).
Popular BNPL companies typically revolve around the widespread “Pay in 4” model that allows customers to purchase an item and pay for it in smaller increments over four months. While they appear convenient, Pay in 4 BNPL options present challenges for health care merchants. For example, most Pay in 4 options have low loan limits that won’t cover a significant expense, such as an emergency surgery. In addition, the repayment period typically is short, payments are due every two weeks, and late fees apply. Not to mention, most Pay in 4 promote 0% interest charges, but if a client misses a payment by a day or dollar, the debt can skyrocket, and the pet’s care can become unmanageable.
Select companies within the BNPL market are different, offering higher limits over longer terms. These entities, known as BNPL 2.0, enable veterinary hospitals to provide terms of six to 24 months, with transparent terms and fees for clients and fair prices for the practice.
BNPL 2.0 redefines the future of payments and sidesteps the tricks, gimmicks and gotchas typically found in first-generation BNPL products.