Shopping is one of our primary habits, and we often find ourselves in such a situation that we do not have enough cash to buy certain things. Often during the end of the month, people crunch for shopping as they have to wait for their salary to be credited. However, with buy now pay later services, you need not stop yourself from shopping.
Buy Now Pay Later, also known as BNPL, is changing how people shop by giving them better deals and offers. With BNPL, consumers can buy any product of their liking and pay for it over a series of installments or generally within a defined period. If the amount is quite low, there is no interest in this service.
Many small and large-scale vendors now support Buy Now Pay Later services at their stores due to huge customer demand, which also benefits them. Stores have stated that they are seeing customers buy more with this service as there is not much financial burden on them. Buy Now Pay Later services are also big on e-commerce sites, offering many discounts and deals for first-time users.
Some of the reasons why the Buy Now Pay Later service is a success
Credit Card was the first version of this service. However, people had to pay huge interest rates even for small purchases, which led to a decline in the use of this service.
There are often offers on your favorite product, but the credit crunch won't let people buy it. BNPL helps you buy at the right time, saving good amounts.
Many people generally do not like using credit cards as they have to create a good credit history to get good credit in their account.
People need not have a credit check for borrowing money from this service.
The target audience of BNPLs
The target audience of BNPL services has been more Generation Z people. It has been witnessed that there was an increase of 600% in the usage of Buy Now Pay Later services by Gen Z people since the year 2019.
One of the reasons why this is famous among Gen Z and Baby Boomers is that these services give huge purchasing power to the younger generation, which credit card cannot do. You must first have a good credit report to secure good credit card credit. This takes some time, and certain criteria must be met to make a high credit value. BNPL, on the other hand, has a much easier onboarding process and is relatively easy to use, with many merchants supporting this model.
Advantages of using Buy Now Pay Later Service.
Secure and faster payment options – Using BNPL, consumers can check out any store with just one tap on the application, making it quite fast. The customer's transaction is encrypted, making it quite secure.
Better buying power – Consumers can buy any product they like. If there is a flash sale, consumers need not check for cash. Instead, they could just use BNPL and save money for the time being by buying at the right time.
Interest-free repayment option – Consumers are often provided with an interest-free repayment option and can choose a timeline during which they would repay this loan amount. This gives better control to the consumers, and they can plan their shopping or any need accordingly.
Easy approval process – For BNPL services, one need not have a good credit history, and the financial institutions just require a digital KYC which can be done from anywhere by the consumers. This has led to the success of BNPL over credit cards greatly.
An Easy win for BNPL services
With credit cards on the decline and more purchasing power offered by Buy Now Pay Later service, Gen Z and Baby Boomers are more likely to use this as this provides a good solution to their existing problems. There is little or no interest rate on EMI, and repayment options are one of the major attractions of BNPL services.
Digital finance is the key to tomorrow's world, and BNPL services are constantly innovating in this space to provide the best services for the client.