Buy Now, Pay Later: Everything You Must Know
The financing option known as "Buy Now Pay Later," or "BNPL," enables you to use a service or buy a product without having to worry about paying for it right now. Simply described, it's a short-term credit product in which the lender pays the merchant or service provider when the sale occurs, allowing the buyer to repay the loan later with either no or very little interest.
What is Buy Now Pay Later
BNPL is a short-term financing choice that enables customers to purchase goods and then pay for them over a predetermined time period. They have two payment options: free EMIs or a lump sum payment for the products.
The provider of the Buy Now Pay Later facility will assess interest on the amount if customers don't pay it within the specified repayment period. In addition, missed payments may lower their credit rating.
How does Buy Now Pay Later work?
The greatest segment of the retail sector and the backbone of the Indian retail economy are shopkeepers. Additionally, the majority of the retail trade in the nation is informal, even though a sizable portion of it is credit-driven. The sector has never had access to the resources needed to upgrade and expand. And limited access to operating cash has been a major contributing factor. These small business owners can acquire stock from numerous PAN-India suppliers at the best costs thanks to our services, which assist them in obtaining rapid credit. Thus, it aids in their expansion and increased profitability.
Bank loans are onerous for small-time store owners. They ask customers to put up collateral, and it takes a long time to get approved. As a result, shop owners prefer smaller, more easily accessed credit products over large, costly loans for purchasing supplies and inventory. And that's where Buy Now Pay Later comes into play.
Is using it better than using a credit card?
There are several important aspects to understand about Buy Now Pay Later (BNPL) programmes, despite the fact that they are comparable to credit cards in that they both offer deferred repayment choices. First off, since credit cards demand solid credit histories, BNPL has easier and less complicated access to credit. Second, using Bnplis really simple; all you have to do while making a purchase is select the option during payment.
The lengths of their interest-free credit durations also differ. While the credit duration on credit cards can last up to 45 days, the credit period on BNPL is only 15 to 30 days. However, BNPL does not have any fees like recurring yearly fees or joining fees, whereas credit cards do. Therefore, BNPL is the best alternative for you if you're seeking shorter interest-free credit loans and don't have a credit history.
Why is Buy Now Pay Later becoming more and more popular?
The BNPL facility stands out in these difficult times for a number of reasons.
It enables companies to provide their end customers with a smooth purchasing experience.
It makes one-click checkout possible.
According to the rules of the lender, BNPL is typically a no-cost or low-cost financing alternative for clients with a flexible repayment schedule.
It uses an entirely digital onboarding procedure.
It enables customers to obtain short-term credit for immediate purchases and pay for them later.
Buy Now, Pay Later at the point of sale
Customers in various nations can order a physical or digital BNPL card such as LazyPay card, enabling them to make immediate purchases from merchants who do not generally accept this payment method. Purchases are charged to their account, and they have the option of paying right away, within 30 days, or with finance.
Traditional brick-and-mortar stores can also provide BNPL payment plans, despite the fact that the majority of BNPL transactions take place with internet merchants. Customers who choose this option typically create a QR code using the BNPL app, which is scanned at the time of sale. Then, the customer can wait to pay while the retailer receives credit.
Customers' spending power can improve, and their ability to plan their finances can be increased when they can choose how and when to pay without incurring interest.