Online shopping is becoming increasingly popular because of its convenience. Not only does it allow a person to shop from the comfort of their home, but it can also save them time, energy, and even money. In the aftermath of the 2020 pandemic, new concepts are constantly being developed to make buying even easier.
Among them, one of the most prominent trends is BNPL, or buy now pay later. In today’s market, it has become immensely popular because it allows consumers to purchase products online without worrying about making payments right away. Customers get a hassle-free shopping experience by easing their financial burdens.
It has been a big success with GenZ customers, particularly first-time borrowers.
BNPL – So, what is it exactly?
In this popular financing option, customers are not required to pay immediately for their purchases. Customers are given the option of choosing a future date for repaying the loan or the cost of the products purchased, which is more like a short-term credit given by a third-party service provider.
As opposed to traditional loans, BNPLs offer interest-free financing, or, if interest rates do apply, compared to conventional loans, they are negligible.
Top Reasons why Customers like BNPL
Shop now, pay later is becoming more popular in eCommerce as opposed to using credit cards and cash as payment methods. Here are some reasons why the shop-now-pay-later method is gaining popularity:
- The Convenience of Payment: This new payment option makes it quick and easy to make a payment after purchasing something. Customers can also pay back the amount later, which is an added benefit.
- A Promising Credit Source: Banks and financial institutions prefer not to lend money to people who do not have credit scores or income. Credit card eligibility criteria are generally quite strict. In this way, BNPL is an ideal middle ground for millennials, providing a reliable credit source.
- Seamless Refunds: BNPL enables immediate refunds for products bought via traditional payment methods. In the case of BNPL payments, the refunds are initiated immediately, and the obligation ceases.
- Flexible EMIs: The majority of companies offer easy EMIs that can be paid over a number of days, weeks, or even months. This makes it easier for GenZ customers to purchase items over their limits.
BNPL Program: Things to Remember
Customers should make a budget before committing to any payback period so they won’t spend money on goods they can’t afford. It is important for customers to understand how their payments work. Even though most companies don’t charge interest, a late fee can apply if you miss a payment. Consistently missing payment dates can also harm your credit score.
As long as you feel comfortable returning the money by the due date, BNPL’s success today can be ascribed to its convenience.