Buy Now Pay Later (BNPL) is a thriving business in consumer-centric markets. E-Commerce companies, retailers, and banks are all doing their best to woo the customers by offering them enticing schemes.
The offers have picked up speed during the festive season. Customers are spoilt for choices picking from the multiple players offering short-term credit through BNPL. Now, more than ever before, it is easy for consumers to procure credit through BNPL, even without a credit history.
With BNPL schemes proving ever so successful in the consumer market, many FinTech companies and looking to replicate the Buy Now Pay Later Services in India for Businesses and Merchants.
What is Buy Now Pay Later Services for Businesses
The concept of credit is not a new thing in business and trade. Businesses have been operating on credit and extended terms of payments for centuries. However, the difference between consumer credit and B2B is the payments. Suppliers need to wait months to receive payment on their invoices.
Lack of cash flow restricts the Buyers’ and Sellers’ ability to make more transactions, and that is where Buy Now Pay Later Services for Business comes into the picture. Buy Now Pay Later offers modern credit solutions with payment settlement terms spread out over a few months.
Many small businesses in India have moved to the online space. It has been necessitated by the COVID-19 pandemic and lockdown that disrupted business practices. Many small and medium businesses moved from paper and books to smartphone applications to run their daily businesses.
What are the Advantages of Buy Now Pay Later Services for Businesses in India
Traders and merchants who do not have sufficient cash on hand to stock up their inventory can make a simple online application. Approval turn-around time under BNPL is generally low. The businesses can use the funds to stock their inventory and make repayments over a period of time, usually interest-free.
Any business in need of funds for operations can take advantage of the Buy Now Pay Later for Businesses. With terms and conditions that are transparent and the option to pay later over a period of time, it is advantageous to businesses.
With ready access to credit, merchants assign priority to their business goals. They purchase more stock, broaden their product portfolio, and increase their in-store space and assets. This helps them grow their businesses and widen their customer base.
What are the differences between BNPL compared to other modes of payment?
BNPL Compared To Term Loans
Term Loans are usually designed for large monetary needs and are usually one-time payments. They have a lengthy process of application.
BNPL, on the other hand, provides a seamless borrowing scheme with a revolving credit system. BNPL is a lot quicker and offers convenience.
BNPL Vs. Credit Cards
BNPL has higher rates of approval and lowers interest rates, as compared to credit cards. Also, the terms of credit under BNPL have far more transparency, and terms are simpler to understand than credit cards.
Positives of Buy Now Pay Later Services for Businesses E-Commerce platforms
Providing credit options in the form of Buy Now Pay Later Services is beneficial to E-Commerce platforms.
1. Enabling credit along with the convenience of BNPL results in the acquisition and conversion of more customers.
2. BNPL improves the E-Commerce platform’s Gross Merchandise Value, Average Order Value, and Customer Lifetime Value.
Types of BNPL Loans
Buy Now Pay Later Loans are of two types
No-interest loans where the merchant pays a fee to the third-party lending company rather than the consumer paying interest on the loan.
Loans with interest. These are on-the-spot loans that enable the consumer to purchase at the moment, but similar to a credit card in interest.
In conclusion, Buy Now Pay Later Services for Businesses in India offers traders and merchants the flexibility to seek credit similar to the already established consumer-centric Buy Now Pay Later schemes. Their business need not suffer due to lack of cash flow. They can stock their inventory and conduct their business after acquiring credit through working capital and BNPL. Easy repayment scheme, spread over a period of time and transparent terms make Buy Now Pay Later a boon for businesses in India.