With the passage of time, the country's retail model has seen significant transformation. Credit cards were the most commonly used for purchasing until a few years ago. The 'Buy Now Pay Later (BNPL) model has now taken its place. Many e-commerce companies and start-ups, such as Amazon and Flipkart, now provide BNPL as a payment option to its customers. You can buy things now and pay for them later in this type of store.
With the passage of time, the country's retail model has seen a significant transformation. Credit cards were the most commonly used for purchasing until a few years ago. The 'Buy Now Pay Later (BNPL) model has now taken its place. Many e-commerce companies and start-ups, such as Amazon and Flipkart, now provide BNPL as a payment option to its customers. You can buy things now and pay for them later in this type of store.
As the name implies, this plan allows customers to buy something now and pay later at the conclusion of a set period of time. A BNPL service allows you to purchase things from your partner merchants and pay for them within a 10-day period. However, if a customer fails to pay their account on time, they will be charged interest based on the amount owed.
Some BNPL plans allow clients to break down purchases into no-cost EMIs for three to six months, during which time the payment must be paid. Amazon Pay, LazyPay, Simpl, Slice, and ZestMoney are some of the fintech companies that provide BNPL services.
The Covid outbreak has accelerated the growth of BNPL. Customers choose to pay huge expenses in tiny interest-free EMIs because to the increased demand for e-commerce services as a result of the lockdown. As a result, BNPL has become a popular tool among many people. BNPL has a lot to offer, but it is still a loan, so you must be cautious when using it.
You can easily take a loan from BNPL, but failure to make timely repayments can hurt your credit score. Hence, like with other loans, you need to make sure that the loan is repaid on time to maintain a good credit score. If your habit is not like this then BNPL should be avoided.
You must complete your Know Your Customer (KYC) on various websites and start-ups in order to do so. You must enter your PAN card and Aadhar card information for this.
Customers that choose BNPL are given 15 to 45 days to pay their bills. If you want, you can pay for your shopping in full or in installments. However, whether or not you will be able to use this feature is dependent on a number of factors. The algorithms procedure determines whether you will be supplied products on credit or not.
Their business model is straightforward. As if you went shopping for 1000 rupees. You now select a third-party service provider and the option to pay the balance in four payments. The e-commerce website will already receive Rs 940 from the third-party service provider. Third-party service providers currently receive a 6% commission from these e-commerce websites.
The third-party service provider will deduct 6% fee from the goods you purchased for 1000 rupees and provide 940 rupees to the e-commerce website. After that, you'll pay the third-party service provider 1000 rupees in four installments. Third-party service providers will receive a bonus of 60 rupees as part of this process, which will make your shopping easier.