Buy now, pay later or BNPL has gained traction among customers in a very short time. It is one of the fastest growing online payment schemes with more and more e-commerce platforms and financial websites starting to offer this scheme.
As the name suggests, it basically allows customers to buy stuff they need but pay at a later date. It gives them a cushion period for the customers to come up with the money to pay for the products. The repayment period can vary from 15 days to 2 years depending on the cost of the product and the offer given by the lender.
While some offer interest-free full payment up to a specific time, others convert the total amount into EMIs to be paid at regular intervals. It is an easy way to procure credit and usually just requires filling a KYC with a PAN card.
However, some of its cons include that the total amount per year for which you can buy now and sell later is restricted. The amount of loan sanctioned, as per RBI guidelines, cannot exceed ₹60,000 amount in a year using the OTP-based KYC. In case of defaults or late payment, huge penalties and interest rate is charged.
Now let's look at some major players that offer the ‘buy now pay later option:
Amazon Pay Later
Amazon Pay Later is a hassle-free way to get instant credit. It is a completely digital process and users can pay the amount owed by next month in full or convert it to EMIs ranging from 3-12 months. You can easily track your purchases, repayments, and limit history from a simplified dashboard for this payment mode.
You have to complete one setup process, providing basic details to start using this feature on Amazon. It is offered in partnership with one of its third-party lending partners - Capital Float or IDFC FIRST Bank.
To be eligible for Amazon Pay later, you must have an Amazon.in the account, a verified mobile number, a PAN card, address proof, and a bank account. Also, you must be at least 23 years of age.
Flipkart Pay Later
This scheme also lets users buy products without any payment but the payment has to be completed before the 5th of next month. If completed before that date, no additional charges are incurred on the customer. You can also get the total amount converted to EMIs for up to 12 months. It offers a credit of up to ₹70,000 to its customers.
To apply for this scheme, you have to enter your PAN and Aadhaar details and verify your documents. A usage fee of ₹10 is charged on bill amounts of more than ₹1,000.
Paytm Postpaid
It is a pre-approved instant credit scheme for select customers where they can avail of the credit of up to ₹60,000. You can use it to make purchases from select websites which allow Paytm payments. All users are billed on a monthly basis for all purchases made using the postpaid option and an account statement is sent to the users on the first of every month for the previous month.
It charges 0 percent interest if the payments are completed within 30 days, has no activation fee and is a completely digital process. If you do not pay the full amount in 30 days, a late fee between ₹10 - ₹500 is charged every month till the full amount is paid.
The late fee depends on the amount that is owed. For ₹100-250 owed, the late fee is 10, For ₹250 to ₹500, it is 20 and so on. You can also convert the total amount to EMIs and pay them at regular intervals.
Ola Money Postpaid
Through OlaMoney Postpaid you can pay for Ola rides as well as other online services later. You use this scheme for up to 15 days/30 days at once or till you fully use your credit limit and then pay the entire amount at the end of that period.
You will need to settle your dues either when you have exhausted your credit limit or at the end of the billing cycle. Even if you have not exhausted your credit limit at the end of the billing cycle, you will just need to pay for the amount used.
However, it cannot be used by every Ola user, only the selected members can be a part of this scheme. It can be also used on other apps like BookMyShow, Oyo, Fresh Menu, PharmEasy, Red Bus, Clear Trip, etc. You have to complete your KYC to use this feature and provide your PAN card which is mandatory.
ZestMoney
This is a fintech company that lends money to customers and allows them to pay EMIs even if they do not have a credit card. It provides speedy approval, flexible EMs, and has a transparent repayment structure with no hidden charges.
To apply for this, you must have an account with Zest money and depending on your credit history, salary, etc, you will be given a credit limit and interest rate depending on your history.
After your loan is approved, it will be credited to your account within 7 working days. It claims to have the highest approval rates for loans taken through its platform as well as zero pre-closure charges.
LazyPay
It is a payment service that gives credit online to its customers. Customers have to enter their mobile number to discover their credit limit. It offers an interest-free loan for up to 15 days or converts your amount into cardless EMIs for 3, 6, 9, or 12 months. You can use this scheme on partner websites Zomato, Big Basket, GoIbibo, GoAir, BookMyShow, Samsung, Vi, Tata Sky, etc.
These are a few sites that offer the buy now pay later option. Even with all the benefits and attractive features, customers should be careful while availing of this service.
Before using the BNPL opinion, customers must read the terms and conditions carefully for the scheme and also compare interest rates between these websites to decide which one suits you the best.