Mon. Jun 17th, 2024
Buy Now Pay Later

Buy now pay later (BNPL) is a new and coming cohort-term financing scheme that helps you pay the amount for the goods in instalments within a stipulated period.

You will be surprised by the rising number of online merchants and fintech companies who are offering these facilities to their customers as payment options. Moreover, customers are also opting for this method because it is an excellent credit card alternative. 

This was a brief about merchants buy now pay later. Today we have drafted this article, as it is a detailed guide that explains everything there is to know about BNPL in India 2022. 

What is buy now pay later payment scheme?

When you choose the buy now pay later payment option, you avoid the difficult task of paying for any product from your own pockets. You visit a company or online merchants who provide this facility to make the payment when you purchase the goods. 

Once the lender has paid the money on your behalf, you need to repay the amount within a stipulated time frame. Since the amount paid is a lump sum, you can repay the amount in interest-free instalments. If you do not repay the amount in time, the lender will charge an interest fee, severely affecting your credit score. 

Working of Buy Now Pay Later in India 2022

Many people who are still new to BNPL confuse it with credit cards. The major difference between BNPL and credit cards is that you do not have to pay hidden charges or high interest in BNPL compared to credit cards. 

The working of BNPL is very simple and explained below: – 

  • You buy the products from a reputed and participating retailer. 
  • You select the BNPL option.
  • You pay a small amount as a down payment for the overall purchase amount. 
  • The difference amount will be deducted from your lender in a series of easy and interest-free EMIs. 

No mandatory rule forces you to pay the amount via cash. You can make the payments via credit or debit card, bank transfer, and cheques. 

What are some advantages of using BNPL ?

Listed below are some advantages that merchants can prevail when they opt for BNPL: – 

  • Boost your sales.
  • You get to maintain a good credit score.
  • The transactions can be completed safely and securely. 
  • There are no hidden charges or interest on repaying the amount. 
  • The process is rather simple and transparent.
  • You get a higher average order value
  • You have the flexibility to repay the amount in easy instalments spread over 3,6,12,18 months. 
  • You can use the amount to pay your bills, buy groceries, etc. 

What is the eligibility criteria for qualifying under BNPL in India 2022 ?

In order to be eligible to get products under BNPL, you need to qualify certain eligibility criteria, and they are as follows: – 

  • You should be an Indian resident with a valid ID. 
  • You should be a resident of either a Tier 1 or a Tier 2 city in India. 
  • You must be above 18, and the maximum age limit is up to 55 years. 
  • You should be a salaried individual with a steady income flow from your business or service. 
  • You should have a bank account, and its KYC should be completed. 

What is the main difference between buying from credit cards and BNPL?

The major difference is that, with credit cards, you must expect some hidden charges and high-interest rates. Compared with BNPL, the entire process is very transparent, and it follows a low-cost pricing model. 

You should have a good credit score to get the amount at low-interest rates when buying from a credit card. In BNPL, there is no need to have an excellent credit score. Also, getting approved for Buy Now Pay Later is very easy, as the formalities are a bare minimum. 

The number of companies providing credit cards is more. Whereas a select group of fintech organizations provides BNPL services. There is a standard interest-free period for credit cards. With BNPL, the interest-free period, you can go up to 48 months. 

Final thoughts : This was a detailed guide on everything you should know about merchants buy now pay later payment schemes for business.

By Manish