What is a Pay Later?
Buy Now Pay Later (BNPL) is the new credit option available for millions of consumers who don’t possess a traditional credit card. BNPL is a novel credit option primarily offered by e-commerce websites. Under BNPL, the buyer is allotted a specific credit limit that can be used to purchase items on the e-commerce website. This amount shall be paid in EMIs of 3, 6, 9, or 12 months with a nominal interest rate. Based on the customer's eligibility, they can even get 'No Cost EMIs' on the BNPL for a limited number of months. Although widely prevalent with e-commerce websites, retailers are also adapting to this payment method to increase sales and revenue.
How to avail of the BNPL facility?
The buyer is generally required to sign up for this payment method online on the BNPL website or Pay Later App. They will need to enter your PAN details and bank account details. The finance company then processes this, usually partnering with the seller, and their monthly credit limit is generated. This credit limit is generally based on their average monthly balance assessed by the BNPL facility. Since this account is linked to their bank account, the outstanding amount will be deducted directly from their bank account.
Advantages of Buy Now Pay Later facility:
1. Limit strains on your cash flow.
It may not be feasible to pay for new or used equipment immediately; however, with BNPL services, you can control when you spend the money. Instead of paying immediately, you can pay later to make smaller instalments starting after the sale date. Allowing you to use the equipment to increase cash flow, which means it essentially pays for itself.
2. Enjoy a seamless buying experience.
Most of the BNPL system portals are available online as Pay Later Apps or Websites. You can keep an eye out for your purchases, set up automatic payments, and download data for internal reporting. After spending two years dealing with global economic fluctuations, various businesses are in recovery mode. BNPL services provide an innovative, safe financial bridge for companies that are ready to move forward.
3. Easy User Interface on Pay Later Apps:
Pay Later App designers have really outdone themselves by creating hassle-free user interfaces and designs. Even senior citizens can use such applications and get BNPL in very less time.
4. Interest-free terms:
Most BNPLs are free from interest on the amount borrowed – only fees for when the payment is late. This might happen if you didn't have enough money in your transaction account during the scheduled auto charge or by the due date by the Pay Later App.
5. Auto charging:
There's no need to line up at banks or log in to your online account to arrange payment when you sign up in a Pay Later App. They are deducted from the transaction account indicated during the Pay Later App application.
Should you use the BNPL facility?
Deciding whether or not to use a BNPL is a personal choice based on financial situations and spending habits. Using BNPL platforms for spending you would do anyway; can be a good way to manage finances by spreading the payment over a few weeks. However, if you’re already a heavy spender and have difficulty fulfilling repayments, they could worsen a bad situation. It takes just some time to understand your attitude toward money and better handle managing your finances.
When BNPL works smoothly, such as when consumers have no problems with the products they bought and make their payments on time, it can be convenient. BNPL is a boon to the current fast-growing world of finance and technology. Getting loans in minutes is something that would certainly help you get faster in terms of financing. Customers need to be aware of this facility so that they can secure their precious moments first and pay later.
