Just like, its name suggests, Buy Now Pay Later, popularly known as BNPL, is a financing option that permits you to buy a product or avail of service without worrying about paying for it immediately. Simply, it is a short-term loan product where the BNPL lender pays the merchant or service provider at the point of sale and allows you to repay the loan at a future date with little or no interest charges. You can make the repayment either in a lump sum or in the form of equated monthly instalments (EMIs).
As this payment system gives relief from instantly paying the bills, many Indian entrepreneurs are adopting this system. Numerous banks, retailers, and e-commerce have lined up such schemes for the upcoming festive season. One of the specialities of this scheme is that a large number of borrowers can enjoy short-term credit, even without a credit history. So, BNPL is emerging to be the flavour of the season; it is also getting featured in the Best Indian Business Magazines.
This customer-friendly scheme is the latest craze among young, cash-strapped shoppers seeking instant gratification. According to the predictions of media reports, the BNPL landscape in India can witness a growth of over ten-fold before 2026. As it is creating ease for consumers, especially online shoppers, by offering interest-free credit and fewer obstacles to jump through, the e-commerce market is happy with the launch of this scheme. Its popularity is attracting Best Business Blogs in India.
Features and Benefits of Buy Now Pay Later
BNPL is Convenient
The providers of Buy-now-pay-later are fully integrated within an online store’s checkout, which makes the transaction process easy. Instead of your standard credit card, you just opt to pay with the named BNPL provider on the online store at the checkout. Then, they will sort out the payment plan and email it to you. Purchasing through a BNPL provider is almost automatic once you’ve created an account. You don’t even need to go to your wallet or purse for your credit card to fill out the details.
Easy, Fast Set-up and Approval
It is pretty simple to set up a BNPL account, usually taking no more than a few minutes of your time. Distinct from credit card applications, BNPL providers don’t do credit checks prior to approval. Simply, BNPL Providers ask for some information, including the account from which they will deduct your payments.
Here are the steps for creating a BNPL Account:
- Generate a username and password
- Give your phone number
- Submit the verification code sent to your phone number
- Fill in your name and date of birth
- Fill in your bank account information
That’s how easy it is.
BNPL is Interest-free
Nearly all BNPL providers don’t charge any interest on the amount you borrow – only fees for when your payment is late. It can happen if, for instance, you didn’t have enough money in your transaction account during the scheduled auto charge or by the due date.
Due to its interest-free terms, it is also beneficial for those who have applied for consumer loans. Banks offer consumer loans to individuals who want to buy household goods. These goods can be quite expensive, but with this BNPL system, customers can make payments later without having to pay interest. In this way, this scheme is beneficial to customers in the lower or middle class.
Divided Payment Plans
Sticking to only one payment plan can be difficult. Hence, BNPL providers usually do it for you by doing things like splitting the total amount of your bill into four equal fortnightly instalments, for example.
Then, the amount of the bill is automatically charged to the debit or credit card you’ve nominated when they’re due. You only need to make sure you’ve got enough money in your account. Otherwise, you’ll be charged with a late fee. Due to these divided payment plans, many business buyers are preferring making payments through this scheme, as they have to make big purchases, for which they cannot pay the entire amount in one go.
Seamless Buying Experience
Customers can get a seamless buying experience, as many BNPL system portals are available online. You only need to check out your purchases, set up automatic payments, and download data for internal reporting. In this way, it is simpler for customers.
Actually, after spending nearly two years dealing with global economic fluctuations, the e-commerce market is in recovery mode. Still, various decision-makers know that they need to have the right tools for the job to generate revenue. With the buy now, pay later services, it is offering an innovative, safe financial bridge for companies that are ready to move forward.
Sellers presenting multiple payment options, including BNPL, encourage customers to purchase more products. Usually, Buyers tend to purchase products only when they are comfortable with the payment process. With options like BNPL, buyers don’t have to pay instantly, so they get a credit facility for a short period of time. They can make payments when they have enough amount of payment. Due to this convenience, buyers choose and shop for more than one product, even if it is a bit pricey, which ultimately results in increased sales.
The Bottom Line
During the COVID-19 pandemic, the popularity and importance of Buy Now Pay Later multiplied across the globe. Due to the economic slowdown, consumers had less cash in hand, but the demand for the essential products remained the same. The High demand for products and the necessity of purchasing in a contactless manner shed light on the importance of BNPL. It also captured the attention of famous Online Business Magazines, as it is an outstanding option for those who need something but don’t have the money immediately available.
Even though it seems that BNPL only offers benefits for customers, in actuality, the benefits of Buy Now Pay Later are the same for customers and merchants and, of course, for many Indian business leaders. Sellers only offer this advantageous payment facility because they can secure enormous benefits from it. Consumers are free to make payments later also, so they can buy many products, which increases the sales and eventually increases the profits of the business, in this way playing a valuable role in many Indian entrepreneurs’ success stories.