Buy Now Pay Later: What it is and how do you benefit

The Intricacies of Buy Now Pay Later

By allowing you to make a purchase now and pay for it later, the buy now, pay later (BNPL) option lets you put off paying for it right now. Despite the fact that this is a small-ticket loan, it has grown in importance and popularity due to one major factor: a simple and smooth user interface. The cashless and cardless BNPL makes it easy for customers to do anything from online shopping to bill payments. Here are a few of the advantages of using BNPL:

• Having immediate access to finance is very convenient: There's no need to look into other lines of credit. When you use BNPL, you'll get immediate credit at the point of sale, ensuring a simple purchasing process.
• Usefulness: Some BNPL sites enable you to make a payment by scanning a QR code, while others use UPI to execute the transaction.
• Security and safety: With the help of BNPL, customers may make safe payments without having to swipe their card or enter a PIN number, or they can transfer money from an e-wallet without having to enter their net banking information beforehand. All they require is a One-Time Password (OTP) delivered to their registered cell phone.

Things You Should Keep in Mind When Using Buy Now Pay Later

With BNPL, you have convenience and flexibility, as well as the opportunity to establish a good credit history by honouring your obligations to the lender or merchant and making your payments on time. Using BNPL responsibly may be as simple as following these three steps:

1. Keep a close eye on your BNPL transactions

BNPL transactions are now possible with a variety of merchants and lenders, but remember to keep track of the total spent. Be cautious and keep track of your BNPL transactions if you know your financial situation, credit commitments, and other debts. You may find it difficult to pay back your debt responsibly if you overspend, even if your credit limit allows it.

2. Decide on a payback period that works for you

The repayment periods and tenures provided by BNPL are particularly appealing because of their flexibility. Depending on how long you want to use the service, there may be fees. If you choose an interest-free repayment term, you will not be responsible for any payments.

To avoid late penalties, make your repayments as soon as possible. If you are sure of your ability to pay off the loan in full when your next paycheck arrives, then go ahead and borrow the money. If you've bought anything costly, you may want to think about paying it back in instalments.

3. Don't forget to pay your bills on time

When taking out a loan, like with any other kind of credit, you must exercise financial restraint to avoid accruing late fees, which may harm your credit score. If you want to enjoy the advantages of being a loyal customer, make sure you pay your BNPL balances on time. You may also use calendar reminders and notifications to keep on top of your bills and pay them on time to avoid late fees and interest.

Final Thoughts

BNPL adoption should rise in tandem with seamless, contactless checkout experiences and mobile wallets. Payments made via BNPL techniques increased from 3% in 2018 to 8% in 2019, according to Worldpay's Global Payments Report 2020 from FIS12. Customers are increasingly being given BNPL services outside of eCommerce to pay for goods, and they may one day become as common as credit card payments.