Reading Time: 3 minutes
The festive season is approaching and will bring with it mind-blowing discounts and offers on our favourite brands. But just having discounts doesn’t help if you don’t have enough funds in hand at the right time. The fact that the festive season also warrants gifts for your loved ones makes it even more difficult financially.
That is where the concept of Buy Now Pay Later comes into the picture. It allows you to purchase items now and pay for them later. The procedure is quite simple, you go on merchant websites that have partnered with BNPL providers, choose the item of your choice, and when checking out, use the BNPL provider as your payment of choice. You can make the payment as per the agreement, in instalments, or in a one-shot payment, at no or low interest within the stipulated time period.
Why Use BNPL?
› Offers on merchant platforms
BNPL providers have partnered with many popular brands and e-commerce platforms, where you can make purchases online. The best part of using BNPL is that you qualify for exciting discounts, offers, and cashback, making BNPL a win-win situation.
› Pay in instalments
There is no need to splurge on a single purchase all at once and burn a hole in your pocket. You can simply pay in customized instalments according to your cash flow and savings situation at the moment or later according to the respective billing cycle. This allows you to keep cash handy for a rainy day.
There is pretty much no action happening behind the scenes when it comes to the BNPL option. The pricing models are transparent from the beginning and there is no miscellaneous fee levied separately.
Who Should Avail BNPL?
As we all know, getting instant approval for credit cards can be a nightmare sometimes, especially with regulations around credit scores. Add to that joining fee, renewal fee, and high-interest rates. These factors might discourage some people from using or even applying for credit cards. Buy Now Pay Later hence serve as a great alternative to credit cards.
Consumers who don’t want to use their savings during tough times can also consider BNPL. It allows consumers to make a purchase and pay for it later or in small instalments, thus making sure that there is enough room in their budget for other expenses.
This also is of huge help for consumers who find themselves cash-strapped a week or so before their payday. They can easily purchase products of their choice using the BNPL option and pay for it after their payday.
What Are the Features of Buy Now Pay Later?
› Easy to use
BNPL doesn’t require endless visits to the bank nor meet bank executives at home for any verification. You just have to sign up on the BNPL providers’ site, complete the Know Your Customer (KYC) process, set your spending limit, and you are good to go.
› Low interest
BNPL provides low-interest rates thus encouraging shoppers to make even huge purchases and pay later within the time period.
› One-click checkout
Hopping from one interface to another while making a single transaction is time-consuming. BNPL providers help you to skip multiple steps and make your purchases with one click.
› Single bill for all purchases
BNPL providers make transactions convenient by providing a single bill for all purchases made within a time period. You can either clear the transactions one by one within the time period or you can settle it all at once. The choice is completely yours!
Tips to Remember While Using BNPL
› Beware of overspending
Attractive ads might make it seem like BNPL means that you can buy anything you want no matter how expensive it is and take care of the expense later. Do not buy anything that is outside your budget and risk paying late fees or interest.
› Know the interest rate
Interest rates can be categorized as high and low depending on your income and savings. If you are low on savings and income, even an otherwise low-interest rate might seem high. It is best to be informed about the interest rate and late fees before using a BNPL provider.
› Read about the return policy
It is important to know whether the return policy of the merchant from which you are purchasing is compatible with your BNPL provider. Do you have to pay your BNPL provider the amount after the return is successful? If not, how will the refund take place? These are some things you should know.
The BNPL in India is fast gaining traction and for good reason. If you are all geared for the festive season but your wallet suggests otherwise, BNPL is the perfect digital payment option with a promise of security and ease of access.