In the Buy-Now-Pay-Letters option, customers are getting 35-45 days interest free loan on purchase of goods, after this period, the customers will have to pay interest on the amount remaining outstanding.
In this festival season, fintech and e-commerce companies are offering buy-now-pay letter options to customers to increase their business. Under this, customers are getting 35-45 days interest-free loan on the purchase of goods. After this period, the customers will have to pay interest on the outstanding amount.
Earlier, most companies gave credit lines to customers, under which customers could use the fixed amount. The buy-now-pay-letter option, however, has a higher interest rate than a personal loan. Gaurav Gupta, founder and CEO of Myloncare.in, an online marketplace for financial products, said that credit line interest rates are higher than traditional loans and interest rates are even higher at 20-36 per cent per annum under the buy-now-pay-option option. Is within the scope.
Many fintech companies are offering UPI payment options at physical stores
Many fintech companies have also started offering Unified Payment Interface (UPI) based payment options to customers at physical stores. Under this, customers pay using the app’s UPI ID. For example, Hyderabad-based NBFC Vivify India Finance Private Limited has introduced the FlexPay scheme, in which the pay-letter option can be used on UPI. According to the company’s website, it charges an annual interest at the rate of 36 per cent on the reducing balance and a one-time processing fee of Rs 650.
You can repay the remaining amount like a credit card with interest in the next payment cycle
Legipay, another company already offering pay letter service, has launched a UPI product for payment at physical stores, which have different interest rates for different periods. Like credit, customers can also pay a minimum amount in the pay letter option and the remaining amount with interest in the next payment cycle. Another company, Slice, has introduced a digital credit card on its app in partnership with Visa.