In recent years, Buy Now Pay Later (BNPL) has become a popular financing option. COVID-19 has accelerated the demand for BNPL in India, which has been increasing for around 2-3 years. BNPL has evolved into a more convenient payment mechanism, offering no-cost EMIs to relieve borrowers’ financial stress.
Consumer demand is expected to propel the Indian e-commerce business to a $99 billion market by 2024, according to projections. At the same time, industry analysts predict that BNPL will rise from 3% in 2020 to 9% in 2024, making it the fastest-growing online payment method.
According to a BNPL survey conducted in Q4 2020, BNPL would expand by 65.5 percent in India by 2021, reaching a value of $11,570.7 million. From 2021 to 2028, the use of this payment form is predicted to grow at a 24.2 percent compound annual growth rate (CAGR), bringing the gross merchandise value of BNPL in India to $52,827.2 million in 2028, up from $6,990.5 million in 2020.
Buy Now Pay Later (BNPL) systems have emerged as credit card rivals with similar benefits. The BNPL industry has recently gained a lot of attention, especially during the holiday season. Financial experts, on the other hand, have identified hidden charges and user restrictions as serious roadblocks.
ZeroPay, a FinTech firm, has devised a user experience model that eliminates all existing limits and hidden charges in the segment to make it more user-friendly.
What exactly is BNPL?
Shop now pay later (BNPL) is a sort of financing that allows customers to purchase something now and pay for it in three or more installments over a period of time that is interest-free. The BNPL provider settles the amount with the merchant in full on behalf of the buyer.
This alternative is for young, cash-strapped millennials who aren’t familiar with credit and don’t have credit cards. It enables them to secure credit for small-ticket purchases fast. A first-time buyer must complete KYC requirements on the provider’s platform. BNPL vendors use analytics to learn about their customers’ buying behaviour and evaluate their creditworthiness.
Benefits of BNPL
The following are some of the advantages of BNPL:
Reduces the cost of living
Credit is available immediately.
The transaction is safe and secure.
You have the option of selecting a repayment period.
EMI at no cost
The process is simple and transparent
Users may now purchase more freely anywhere with zero interest, no late fees, and zero costs on Zeropay, the unique OTT-based BNPL platform, thanks to the removal of limits and charges.
The platform operates on a network effect paradigm, in which a customer instantly onboards a vendor by simply purchasing from them. This strategy allows users to shop from anywhere without having to worry about whether or not the merchant is linked with the platform. Zero pay is also the first BNPL platform that does not charge late fees to its customers.
Long background checks have long been a requirement of the credit industry’s user onboarding process. Zero pay has made this easier by providing a quick KYC process that takes less than 45 seconds to complete.
This resulted in the app receiving over 10,000 downloads in the first week of its release and over 40,000 downloads in less than a month. The loans are given depending on a user’s credit score, and repayment is divided into three payments with no interest charged on the loan amount. The platform is entirely reliant on the income earned by each transaction from the vendors.
Zero pay believes that businesses should be designed around enabling customers to find answers, as part of its objective to build a healthy credit climate.
How to get the most out of BNPL
The ability to postpone payment and divide it into smaller instalments without paying interest appears to be highly appealing. Customers frequently use the buy now pay later method to make exorbitant purchases. People can be persuaded to spend more than they should by small sums of money.
Before you hurry to use a BNPL loan to fund every aspect of your life, make sure you read the fine print. Younger borrowers must remember that their credit history is still being established. Your payment history determines your creditworthiness in the future. If you use your credit card responsibly and pay it off on time, you may be given increased spending limits for future purchases.
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