Buy Now, Pay Later is a new credit option where the buyer is given a credit limit that can be used to buy things from online e-commerce website or at offline retail stores. The amount can be repaid interest free in 30 days, or shoppers can choose EMIs of 3, 6, 9, or 12 months at a nominal interest rate. Customers using Buy Now Pay Later get additional discounts and cashbacks on e-commerce website partners. Many a times, you may be eligible for ‘No Cost EMIs’ during special festival day sales. Though this is most common on e-commerce platforms, shops are also adopting this payment method in order to improve sales and revenue.
Some Popular Buy Now Pay Later Providers In India –
- Simpl
- ZestMoney
- CashE
- LazyPay
- EarlySalary
- Amazon Pay Later
- Flipkart Pay Later
- Ola Postpaid
- Paytm Postpaid
With the Corona pandemic threatening lives and safety, people have taken up online shopping for almost everything. Groceries, fresh veggies and fruits, kitchen needs and home improvements, fashion & lifestyle, mobiles and electronics; they are able to find some of the best deals on all this through hundreds of e-commerce platforms.
But the crux of the issue is, not every shopper is eligible for a credit card. Credit cards are basically unsecured loans that give you credit limit up to 5 times your gross monthly income. But they come with strict eligibility requirements and someone with no regular income cannot obtain one.
Enter Buy Now Pay Later! It is disrupting the entire credit card industry by offering credit limits to individuals with poor credit history or no credit history at all. The credit limit may not be as high as credit cards, but they do offer some reprieve to that ardent online shopping fan.
- Who Can Avail Buy Now Pay Later?
Anyone can avail Buy Now Pay Later! That is the best thing about it. Whether you have a credit card or not; whether you have a good credit score or a not so good one; Buy Now Pay Later can be availed by everyone. This scheme is primarily based on your bank account average balance and your purchase pattern. So more borrowers are covered under the umbrella of BNPL.
Read More: How to build a great credit score?
- How Does Buy Now Pay Later Work?
In most cases, the buyer must sign up for this payment option online. You must provide your PAN and bank account information. The finance firm then processes this, usually in collaboration with the vendor, and your monthly credit limit is established. Once you’ve joined up and your credit limit appears in your account, you can use it to make online purchases everywhere that payment option is allowed. Under this strategy, most BNPL providers have brought in lakhs of vendors and merchants to give this service to interested buyers.
- What Are The Interest Rates And Other Fees Associated With Buy Now Pay Later?
The primary feature of Buy Now Pay Later is that it offers 30 days of interest free credit. No charges, no fees; you can repay the entire amount on the due date. Or, you can choose 3, 6, 9, or 12 month EMIs for a very attractive interest rate. If you fail to make a payment, a late payment fee of Rs.250 – Rs.500 is charged every instance.
- Why Should I Choose Buy Now Pay Later For My Shopping?
Buy Now Pay Later has allowed many buyers to get interest free credit for a month or so. They choose to use this method while their savings earn some interest in the bank account.
- The application process is straightforward and quick, taking less than ten minutes to complete.
- Get credit limits of up to Rs.4 lakh and shop across several platforms.
- In addition to your credit card, we can supply you with an additional credit line. As a result, consumers’ purchasing power has increased.
- When BNPL customers shop on e-commerce sites, they get additional benefits and savings.
- Can be used at merchant locations for ‘San & Pay’ options as a UPI payment mechanism.
- On festival days and during special sale seasons, consumers are also provided unique ‘No Cost EMI’ packages.
- Account management, purchases, and payments may all be completed completely online.
- What Are The Key Differences Between A Credit Card And The BNPL Payment Method?
| Credit Card | Buy Now Pay Later |
| Interest rate is pretty high; in the range of 30 – 40% per annum | Interest rate similar to personal loans and hence in the range of 10 – 20% |
| Not limited to only certain retailers or e-commerce websites | Generally partnered with specific retailers and e-commerce websites |
| Strict eligibility criteria | Eligibility criteria is a little less stringent |
| Credit limit based on gross monthly salary | Credit limit based on monthly average bank balance |
| Option to pay just the minimum amount due in a billing cycle | No option to make part payments |
Buy Now Pay Later is comparable to a digital credit card in that it allows you to purchase whatever you want without the constraints of the credit card application process and stringent eligibility requirements. Buy Now Pay Later empowers consumers by increasing their spending power!