The capability to make payment in small proportions without paying any interest is the latest craze among people especially the young cash-strapped generation that wants to enjoy the instant satisfaction that this mode of payment (BNPL) offers. Seeing the popularity, a number of financial institutes such as banks, e-commerce, or retailers have come up to please their customers’ needs.
Buy Now Pay Later has made it possible to enjoy the shopping even for all those borrowers who do not any credit history. For all those shoppers or retailers, who have to tighten the strings of their purses due to some reasons or the retailers who are in need of some money to maintain their cash flow, this mode of payment has proved quite a boon. Here are few points to understand the way BNPL works:
- What Does BNPL Mean: BNPL (buy now pay later) is known as that financial path which allows people to buy those items that they cannot afford to pay immediately and can get the facility of paying the amount later in installments and that too without paying any interest. The BNPL institute, that provides the finance, is supposed to pay the bill to the retailer on behalf of the buyer. This option normally targets those youngsters who are new-to-credit, don’t have much cash or credit cards or the retailers who want to expand their business. This mode enables them to have an easy availability of cash for small purchases. The interest-free credit limit is generally from 15 days to 45 days.
- Things that can be bought using BNPL: Recently most of the e-commerce companies and even banks have started giving BNPL facility to the retailers or shoppers. A small business can get the advantage of this facility because though small amount, he needs not to pay the interest. BNPL option helps you in buying a wide range of items such as electric gadgets, apparels, travel tickets, groceries and other items. If you are running a small business like a readymade garment store or you want to buy some bulk items for your grocery store, can use this facility in times when you are running short of money.
- Credit card vs BNPL Option: There is no doubt that the credit card has already given you the option of delaying your payment for a certain time and charges interest if the payment is delayed than the stipulated time. You may feel it is the same as BNPL but there are some differences in paying via a credit card or using the option of buy now pay later mode. A credit card can be used almost with every business while to use your BNPL option, your provider should have a partner merchant. In order to get a credit card, you may have to pay some amount while the BNPL option can be obtained without any fee. Compared to a credit card, you have to pay very low interest rate on the BNPL card in case of late payment. While credit cards demand a particular income threshold, BNPL does not need any eligibility.
These are the points that can explain how a BNPL option works. If you also want to know more about buy now pay later for business, you can contact Apickle, a leading company providing BNPL facility to those who are in need of some quick money.