Know the tale of BPNL: the current trend in Ecommerce

E-commerce has surely captured a major market and is yet fluently penetrating the business world. The constant acceptance of digitalization among people is also an added advantage to the framework. People are loving this quick access to a broader variety and that too wrapped with convenience.

But what’s helping e-commerce to furnish progressively is their frequent lucrative additions. The new addition is BNPL.

Buy Now Pay Later (BNPL)

BNPL is quite meticulously defined by its very own full form. It is not a financial instrument but leverage levied upon the customers. More convenience, for sure.

BNPL is short-term financing, an option that would allow shoppers to pay their bills for an extended period. It comes with a low or no interest financing factor for purchasing. No extra pennies are required for its utilization.

It could also be acknowledged as a point of sales(POS) financing, offering the same advantage to the customers i.e., flexible time for payment. Companies like Affirm, AfterPay, Klarna, and PayPal Pay have already adopted BNPL for offering micro-loans to their customers. Now in some cases, shoppers would generally go for the one-time payment alternative during checkout to cut the installment period. Otherwise, might sign up on payment platforms that are tied with certain specific distributors and give them a plethora of plans for the repayment while checking out.

So how does BNPL work?

The operational model of BNPL remains the same for all the retailers except for the terms and conditions of its usage. It is set subjectively, different for different retailers.

The due process of the working of BNPL is quite simple.

• First, you are ought to purchase and while paying for the “buy now pay later option”.
• According to your retailer’s association, you will be furnished with several installment options.
• As you decide to do ahead with one, a soft credit check will be issued to check your credit standings. Do not worry, it won’t affect your credit scores and will give its decision in seconds.
• And as soon as it gets approved, you will be asked to make the down payment which would be the bare minimum. And you are free to pay the rest of the amount later and that is too interest-free.

*Soft Credit Check- Oftenly known as soft credit inquiries, are undertaken by the financial institutions to analyze your goodwill associated with your past credits.

Is BNPL working for the business?

Earlier people with big purchasing plans used to consider the option of POS financing. But with the convenience BNPL is providing, It is massively being accepted by the small purchases as well. And with the current covid-19 crisis, people have extensively trusted BNPL for paying for their expenditure against the high-interest charges levied for credit card usage.

And, thanks to all the surging demands of digitizing the world, we are left with the least possibility of the sun setting on the land of the BNPL users.

Are there any cons associated with BNPL?

Not cons exactly, but there are certain rules to this game that must be acknowledged before its trial.

• BNPL loans are added to your loan debt and not to your credit card debts. Although they don’t affect your credit scoring, they also do not reward you with good credit on any repayment. This is not the case with credit card debt repayment as they offer cashback and reward points.
• Any late or missing installment payment would surely attract late fee penalties and a notorious credit score.
• In the case of a return, the whole situation becomes thoroughly complicated. Payments got to be continued even if the purchased item is returned. You will surely get your money back. The processing of the refund could take a while. Meanwhile, any missed monthly payments would not be a good deal to follow.

Conclusion-

The requirement of BNPL is an actual truth. E-Commerce is an undeniable reality. With the gigantic evolution of physical shopping turned into screen shopping, the distinct payment options have not just created convenience for different customers but also it has boomed the selling and purchasing power. If awareness is imbibed among customers, BNPL could see more growth globally in the near time.