With the increase in the scope of e-commerce in the country, there has also been a sharp increase in card purchases. Online shopping and shopping on the Internet have gained tremendous momentum due to various types of credit cards, debit cards and payment apps. But now payment and other e-commerce companies have started giving the option of ‘Buy Now Pay Later’ to the customers. BNPL gives you the convenience of making purchases without paying instantly. Also converts your payment into EMI. There is a period of 15 to 45 days for making the payment. The amount spent by you on the payment date gets debited from your bank account. If you do not want to make the payment on the payment date, then you can get the bill converted into EMI.
BNPL is getting popular due to simple format
BNPL is gaining popularity among shoppers due to its simple format. It has become more popular during the Corona epidemic because people’s income has declined. It is becoming quite popular among the youth as BNPL provides interest free credit to them over a certain period of time without having a credit or debit card.
There are many other reasons for its popularity. You do not have to share your card details, bank details or any other financial information while making purchases through this. This eliminates the fear of card or payment fraud. The shopping experience is better by not asking for OTP and bank details. The customer gets complete security in online shopping and his time is also spent less. There is no hidden charge in this. Whereas credit cards have hidden charges. The user knows how much his credit limit is and when is the bill payment date. Late payment attracts a much lower penalty, while credit card payment delays attract higher interest.
Many companies including Flipkart and Paytm have launched BNPL
Currently, Flipkart’s BNPL is giving 30 days credit on purchases. That is, after 30 days of purchase, you can make interest free payment. OTP is not required for most of the transactions and its security is also like that of the bank. It has full digital KYC facility, hassle-free checkout facility on purchases up to Rs.10 thousand. The shopping process is completed with a single click. Seeing the pace of BNPL in the country, e-retail companies like Flipkart and payment services companies like Paytm have started giving full emphasis on expanding the scope of their BNPL.
Flipkart claims that the number of its customers buying from BNPL has increased to 28 lakhs. Its target is to take this customer base to one crore by the end of this year. Ranjit Boyanapalli, Head of Fintech and Payments Group, Flipkart, says that the simple format of BNPL is what is making it popular. BNPL is expanding rapidly in terms of hassle-free shopping experience for the customer.
Is BNPL really profitable?
Despite such convenience in BNPL, it is not necessary that it is available to everyone. Actually, the decision to give you credit is done through machine intelligence. The selection of the user is done through a complex algorithmic process. With this, 100 features, including customer behavior, are processed on the merchant platform. This means that Custom does not choose BNPL, BNPL chooses the customer.
Despite all these advantages and disadvantages, it is still a kind of short term loan. In this, you have a credit limit which depends on the way you spend. There is also a billing cycle for you, under which you have to make payments. Very rarely, the right penalty has to be paid for not making the payment on time. Failure to pay the penalty may result in your account being blocked. And lastly it is also worth mentioning that BNPL also induces you to spend unnecessary. But the purchase decision is in your hands.