What is Buy Now Pay Later? Everything you need to know!
Updated: Oct 29, 2022
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In recent times, e-commerce companies, fintech players, and banks have started offering BNPL facilities to customers. Several application-based fintech platforms like PayTM, PhonePe, LazyPay, MoneyTap, CASHe, and Kissht, among others, have extended BNPL loans. Therefore, Buy Now Pay Later (BNPL) is gaining popularity as an alternative payment option.
As per Goldman Sachs, the Indian online business would develop to $99 billion by 2024 due to buyer interest. Authorities on the matter agree that BNPL will ascend from 3% in 2020 to 9% in 2024, making it the quickest developing web-based installment component in India.
Buy Now Pay Later permits its customers to make purchases now and pay for them at a later point in time. The repayment can be made through EMI or in total, with less or no interest charges.
The prospect of BNPL in India is proliferating, as a report by RedSeer predicts that the number of BNPL users in India can rise to 80-100 million customers by 2026, from 10-15 million currently. The report also says that the country’s BNPL market will rocket to US$45-50 billion by 2026, from US$3-3.5 billion now.
Financing through BNPL is typically low-cost or cost-free, with a vast range of repayment options.
Now the question appears “How a good BNPL system is making lives easier for small business owners? ”
Having a good BNPL system is a win-win situation for everyone:
Merchants get the cash forthright,
Retailers get the goods and services without spending money in advance, and
Lenders get clients who can be given a larger loan in the future, with a clear volume multiplier effect.
With the growing demand for these payment options, many fintech players have entered the BNPL market to capitalize on this opportunity.
How does Buy Now Pay Later work?
When you make a purchase at one of the partnering retailers, you will have the option of 'Buy Now Pay Later.'
When you choose the service, you will be required to make a small down payment, which will be a small percentage of the total purchase price.
After you make the down payment, you can structure your repayment schedule in a series of interest-free EMIs and enjoy your purchase without worrying about the cost. Customers can shop now and pay later.
Benefits of Buy Now Pay Later
BNPL is a more accessible, transparent, and convenient alternative to credit cards
More affordable: No charges to access your credit.
Transparent process: SynoFin provides transparency in the process by providing all the details regarding your credit limit and other relevant information.
Security: provides a platform that uses AI to safeguard your online transactions for any of our partner stores
Flexibility: you are free to choose how and when to repay the amount.
Instant access: SynoFin BNPL makes it easy and hassle-free to finance your purchases so that you don't need to wait anxiously to avail of a credit card.
No-cost EMI: Repay the credit with 0% interest* in 3 or more bite parts.
Top BNPL players in India
Amazon Pay Later
Flipkart Pay Later
BNPL vs Credit Card
Credit cards have been around for decades but BNPL is now taking over credit cards, here are some of the reasons mentioned below:
Need credit history
No prior credit history
Incur joining or annual fee
No extra charges or usage fee
Difficult to get approval
Easy and hassle-free approvals
Includes interest rates
0% interest rates
Shorter interest-free period
Interest-free credit period of three months and of 6/9/12 months for select merchants.
BNPL is a great addition to the financial industry that helps customers get better value for their money. It is also sometimes referred to as “point-of-sale installment loans,” which is a type of short-term financing. BNPL allows customers to pay for purchases over time, often with zero or little interest. Merchants offering BNPL to customers can check out SynoFin for pay later services.
SynoFin is a brand by Synoriq. We are building India's holistic technology for NBFCs. Our rich lending system supports 15+ lines of businesses including Buy Now Pay Later (BNPL), Subvention and more.
Is Buy Now Pay Later an installment loan?
Yes, Buy now pay later is a type of installment that you can pay through EMIs. After some time, interest will be charged which is spent by you, and in case you fail to pay within the specific period, the penalty is charged.
Do you pay interest on Buy Now Pay Later?
Yes, you will have to pay interest on BNPL. The interest charged depends on various factors such as the amount spent, repayment tenure, credit score, etc. Initially, there is a credit-free period offered by some companies. If you manage to repay the amount within that period, you will not be required to pay any interest on it.
Does BNPL affect credit score?
Yes, it does. As long as you repay the amount on time, your credit score will not be impacted. If you clear the amount on time, your credit score is likely to improve. However, if you miss or delay your payments, then your credit score will fall.
Who are the top BNPL players in India?
Amazon Pay Later
Flipkart Pay Later
Are banks offering Buy Now Pay Later loans?
Some of the banks offer to pay later loans. These banks are:
ICICI Bank, etc.