{"id":6552,"date":"2022-03-17T12:22:15","date_gmt":"2022-03-17T06:52:15","guid":{"rendered":"https:\/\/cashfree.com\/blog\/?p=6552"},"modified":"2026-01-14T21:15:51","modified_gmt":"2026-01-14T15:45:51","slug":"buy-now-pay-later-bnpl","status":"publish","type":"post","link":"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/","title":{"rendered":"BNPL: What is Buy Now Pay Later, How it Works?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #005c31;color:#005c31\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #005c31;color:#005c31\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#What_is_BNPL_Buy_Now_Pay_Later\" >What is BNPL (Buy Now Pay Later)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Buy_Now_Pay_Later_Statistics_Driving_BNPL_Growth_In_India\" >Buy Now Pay Later Statistics: Driving BNPL Growth In India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#How_Does_Buy_Now_Pay_Later_Work\" >How Does Buy Now Pay Later Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Buy_Now_Pay_Later_Business_Model\" >Buy Now Pay Later Business Model&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Impact_of_BNPL_on_Businesses\" >Impact of BNPL on Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Impact_of_BNPL_Buy_Now_Pay_Later_on_Customers\" >Impact of BNPL (Buy Now, Pay Later) on Customers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Customer_Journey_of_BNPL\" >Customer Journey of BNPL<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Buy_Now_Pay_Later_Vs_Credit_Cards\" >Buy Now Pay Later Vs Credit Cards&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#BNPL_vs_EMI\" >BNPL vs EMI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Buy_Now_Pay_Later_Pros_Cons\" >Buy Now Pay Later: Pros &amp; Cons&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Choosing_Buy_Now_Pay_Later_Service_Provider_What_All_To_Consider\" >Choosing Buy Now Pay Later Service Provider: What All To Consider?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Shift_Of_Traditional_Banks_Towards_Buy_Now_Pay_Later_Model_In_India\" >Shift Of Traditional Banks Towards Buy Now Pay Later Model In India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Buy_Now_Pay_Later_Examples_From_Different_Industries\" >Buy Now Pay Later Examples From Different Industries<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Top_Buy_Now_Pay_Later_Service_Providers_In_India\" >Top Buy Now Pay Later Service Providers In India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><\/li><\/ul><\/nav><\/div>\n\n<p class=\"wp-block-paragraph\"><strong>Buy Now Pay Later (BNPL)<\/strong> is a payment method that is gaining popularity in today\u2019s time; it is a highly convenient payment option, essentially reducing a borrower\u2019s financial burden by offering no-cost EMIs. This innovative payment method was projected to reach a whopping<a href=\"https:\/\/www.chargeflow.io\/blog\/buy-now-pay-later-statistics\"> <a href=\"https:\/\/www.chargeflow.io\/blog\/buy-now-pay-later-statistics\">$560.1 billion<\/a><\/a> in 2025, which is a 13.7% year-over-year increase. The users have started to adopt the buy now, pay later business model, so much so that it is expected to accelerate and reach 900 million by 2027. This indicates that the order value of Buy Now Pay Later is going to increase by at least 20-40%, clearly impacting the conversion rates for businesses. Experience has shown that customers who get an option to complete a high-value purchase with a flexible payment option are likely to proceed.\u00a0<br><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s take a deeper look at the very concept of BNPL, what\u2019s driving its growth, the benefits it offers to customers and merchants respectively, and the top players operating in this payment space.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-bnpl-buy-now-pay-later\"><span class=\"ez-toc-section\" id=\"What_is_BNPL_Buy_Now_Pay_Later\"><\/span>What is BNPL (Buy Now Pay Later)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The concept and meaning of <a href=\"https:\/\/www.cashfree.com\/buy-now-pay-later\/\" target=\"_blank\" rel=\"noreferrer noopener\">Buy Now Pay Later (BNPL)<\/a> is quite simple. It&#8217;s a new-age financial service that <strong>enables buyers to purchase a product or service and pay for it at a later stage<\/strong> in installments.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Such transactions are often interest-free. However, a fee may be levied in the case of late or no payment(s). Ideally, this option targets young, new-to-credit, cash-strapped individuals who do not own a credit card. However, anyone and everyone can use this mode of payment.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The short-term financing option is especially gaining much popularity among the masses as it enables them to buy commodities of larger ticket-sizes, converting them into affordable buying options.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, the iPhone 13, valued at INR 79,900, is a premium smartphone not everyone can afford.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"> With Buy Now Pay Later, a customer can convert the entire amount into small, interest-free installments and use the smartphone right away. BNPL is ideally bringing more convenience into the hands of consumers with aspirations yet low in-pocket cash. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">[<strong>Suggested Read: <a href=\"https:\/\/www.cashfree.com\/blog\/smartsell-by-cashfree-payments\/\" target=\"_blank\" rel=\"noreferrer noopener\">Boost Conversions by 30% with Cashfree Payments\u2019 BNPL Widget<\/a><\/strong>]<\/mark><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From a business point of view, Buy Now Pay Later benefits brands by increasing,<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>customer lifetime value<\/li>\n\n\n\n<li>conversion rate<\/li>\n\n\n\n<li>engagement rate<\/li>\n\n\n\n<li>customer return rate<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">However, it\u2019s equally important to note that most Buy Now Pay Later players operating in the Indian market typically offer only a<strong> 15 to 45 days interest-free period.<\/strong> Just a handful of them provide an option to pay through <strong>EMIs for longer tenures like 3, 6, 9, or 12 months<\/strong>.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Similarly, the credit limit typically ranges between INR 2000 and INR 30,000 with only a few lenders offering a credit limit up to INR 2 lakhs. Here are some top-rated Buy Now Pay Later players and their offerings. <\/p>\n\n\n\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex\">\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" fetchpriority=\"high\" decoding=\"async\" width=\"770\" height=\"529\" data-attachment-id=\"8434\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/repayment-cycle-days-of-top-5-bnpl-players-in-india-1\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1.png?fit=1080%2C742&amp;ssl=1\" data-orig-size=\"1080,742\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1.png?fit=770%2C529&amp;ssl=1\" data-id=\"8434\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1-1024x704.png?resize=770%2C529&#038;ssl=1\" alt=\"what is BNPL\" class=\"wp-image-8434\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1.png?resize=1024%2C704&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1.png?resize=300%2C206&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1.png?resize=768%2C528&amp;ssl=1 768w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Repayment-Cycle-Days-of-Top-5-BNPL-Players-in-India-1.png?w=1080&amp;ssl=1 1080w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/figure>\n<\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-buy-now-pay-later-statistics-driving-bnpl-growth-in-india\"><span class=\"ez-toc-section\" id=\"Buy_Now_Pay_Later_Statistics_Driving_BNPL_Growth_In_India\"><\/span>Buy Now Pay Later Statistics: Driving BNPL Growth In India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">India is home to about 1.3 billion people. Of these, <a href=\"https:\/\/www.livemint.com\/industry\/banking\/buy-now-pay-later-business-set-to-surge-over-ten-fold-in-india-11636370182746.html\" rel=\"nofollow\">only about 60 million Indians have access to credit cards<\/a>. This means, nearly 93% of the population uses other means of payment. Buy Now Pay Later taps into this market segment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The short-term financing option has created a niche for itself in the payment industry. It has given this 93% of the population an option to avail interest-free credit facilities and make buying commodities an easy breeze.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At present, Buy Now Pay Later in India <a href=\"https:\/\/www.financialexpress.com\/industry\/trending-now-buy-now-pay-later-here-to-stay-if-risks-reined-in\/2375617\/\" rel=\"nofollow\">values around USD 3-3.5 billion<\/a>, which, looking at the current pace, is expected to touch USD 50 billion by the end of FY 2026.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It won\u2019t be a surprise to see India becoming the second largest Buy Now Pay Later market in the world by then. On a global scale, <a href=\"https:\/\/www.alliedmarketresearch.com\/buy-now-pay-later-market-A12528\" rel=\"nofollow\">BNPL is expected to become a USD 3.98 trillion payment segment by the end of FY 2030<\/a>, reports Allied Market Research.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Market veterans and research firms like <a href=\"https:\/\/www.telegraphindia.com\/business\/indias-buy-now-pay-later-industry-set-to-surge-over-ten-fold-within-four-years\/cid\/1837990\" rel=\"nofollow\">Redseer<\/a> are also estimating that the current penetration of Buy Now Pay Later will increase to 80-100 million users by then, compared to current 10-15 million users.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the same time, Pine Labs, India\u2019s largest Buy Now Pay Later EMI platform confirms that it saw nearly <a href=\"https:\/\/www.thehindubusinessline.com\/money-and-banking\/buy-now-pay-later-is-big-draw-for-indias-gen-z\/article33895724.ece\" rel=\"nofollow\">60-70% higher adoption of the BNPL payment option in January 2021<\/a> compared to the previous year. ZestMoney too stated that it saw the demand touch nearly 140% compared to the pre-pandemic time.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As of date, Buy Now Pay Later is one of the fastest growing online payment methods in India. It is expected to <a href=\"https:\/\/timesofindia.indiatimes.com\/india\/buy-now-pay-later-generation-saying-goodbye-to-cards\/articleshow\/84576143.cms\" rel=\"nofollow\">capture nearly 9% of the market\u2019s spending<\/a> by the end of FY 2024 from the current 3% stake.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">BNPL\u2019s ability to serve the urban and semi-urban consumer segment with a weak or no credit history (ineligible to acquire loans), lack of proper financial documents, and small-ticket credit requirements will play a massive role in the growth of this payment segment in the coming years.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Moreover, the ability of Buy Now Pay Later players to use India Stack infrastructure to make consumer onboarding easy and feasible is another reason behind its growth. Similar to many lending products, BNPL\u2019s primary source of revenue is the amount received via late payments and merchant interchange fees.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-2 is-layout-flex wp-block-gallery-is-layout-flex\">\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" decoding=\"async\" width=\"770\" height=\"529\" data-attachment-id=\"8414\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/credit-limit-offered-by-buy-now-pay-later-players-in-india\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India.png?fit=1080%2C742&amp;ssl=1\" data-orig-size=\"1080,742\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India.png?fit=770%2C529&amp;ssl=1\" data-id=\"8414\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India.png?resize=770%2C529&#038;ssl=1\" alt=\"what is BNPL\" class=\"wp-image-8414\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India.png?w=1080&amp;ssl=1 1080w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India.png?resize=300%2C206&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India.png?resize=1024%2C704&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Credit-Limit-Offered-By-Buy-Now-Pay-Later-Players-In-India.png?resize=768%2C528&amp;ssl=1 768w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/figure>\n<\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">While Buy Now Pay Later services may strategically convey that it\u2019s not a loan or a credit, it surely operates on an IOU (I owe you) concept, that acknowledges the presence of debt.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Buy Now Pay Later services are aiding the Indian consumers as well as the merchants. They\u2019re giving both the entities exactly what they need, especially with coronavirus disrupting the financial stability of consumers and the conversion rates of merchants. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In fact, experts say that Buy Now Pay Later is here to stay and grow at an unimaginable pace.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-does-buy-now-pay-later-work\"><span class=\"ez-toc-section\" id=\"How_Does_Buy_Now_Pay_Later_Work\"><\/span>How Does Buy Now Pay Later Work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Buy Now Pay Later business model sits at the crossroads of payment and lending proposition because of its lending and interest-free payment-enabling characteristics. It serves as a frictionless credit option for customers to choose and avail at the time of checkout.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s a flow to help you understand how Buy Now Pay Later works.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" decoding=\"async\" width=\"770\" height=\"441\" data-attachment-id=\"8683\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/bnpl\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/BNPL.jpeg?fit=1080%2C619&amp;ssl=1\" data-orig-size=\"1080,619\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"How Buy Now Pay Later Works\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/BNPL.jpeg?fit=770%2C441&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/BNPL-1024x587.jpeg?resize=770%2C441&#038;ssl=1\" alt=\"How Buy Now Pay Later Works\" class=\"wp-image-8683\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/BNPL.jpeg?resize=1024%2C587&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/BNPL.jpeg?resize=300%2C172&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/BNPL.jpeg?resize=768%2C440&amp;ssl=1 768w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/BNPL.jpeg?w=1080&amp;ssl=1 1080w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-buy-now-pay-later-business-model\"><span class=\"ez-toc-section\" id=\"Buy_Now_Pay_Later_Business_Model\"><\/span>Buy Now Pay Later Business Model&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Ideally, two primary Buy Now Pay Later models are dominant in the Indian payments market. While one drives convenience, the other extends the benefits of credit.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Convenience Model<\/strong><\/td><td><strong>Credit Model&nbsp;<\/strong><\/td><\/tr><tr><td>Comparatively smaller ticket size<\/td><td>Comparatively larger ticket size<\/td><\/tr><tr><td>Usually extends about 15 days of credit period&nbsp;<\/td><td>Offers a credit period of about 3 to 12 months.&nbsp;<\/td><\/tr><tr><td>Merchants pay a small percentage of transactions to the BNPL service provider<\/td><td>Has two sub-categories&nbsp;<br>1. Zero-interest EMIs &#8211; Merchants pay a small percentage of the transaction to the BNPL service provider <br>2. With interest EMIs &#8211; Customers are charged interest. Hence, merchants pay no additional fee to the BNPL service provider<\/td><\/tr><tr><td>Late fee is levied to a customer&nbsp;<\/td><td>Late fee is levied to customer<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">According to a Buy Now Pay Later India report published by Experian, the country\u2019s retail digital lending ecosystem is expected to touch USD 350 billion by the end of FY 2023. Digital lending players along with new Fintech businesses such as payday, SME lending, and Buy Now Pay Later, especially, are playing a vital role in boosting the growth.&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Such avenues are not only giving customers the freedom to buy commodities of their choice and not worry about the price tag, but benefitting merchants with higher engagement and conversion rate, and an increased customer return rate.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_of_BNPL_on_Businesses\"><\/span><strong>Impact of BNPL on Businesses<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Buy Now, Pay Later (BNPL) simplifies payments for customers and contributes to business growth. BNPL providers pay the full amount of the product on the customer\u2019s behalf and then make an instalment plan for the customer to pay later.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Higher Conversion Rates<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">BNPL reduces the feeling of buying products at high prices. By providing support to its customers, it breaks down a larger amount of the product into smaller, manageable instalments. This encourages customers to complete the payment process, who otherwise abandon their carts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Increase in Average Order Value (AOV)<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Customers are more likely to purchase higher-priced items or add more items to their cart when they are not required to pay the full price up front. The total transaction size rises as a result.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Access to a Wider Customer Base<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">BNPL enables businesses to serve a large number of customers who lack credit cards, prefer not to use them, or are currently short of funds. Many customers are new to credit but comfortable with digital payments.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Faster Checkout Experience<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">BNPL streamlines payment processing by offering instant approvals with minimal documentation. This improves the customer experience and satisfaction, thereby promoting repeat purchases.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Better Cash Flow for Merchants<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Merchants typically receive the whole amount upfront from the BNPL supplier, even when customers pay in instalments. This guarantees steady cash flow without raising credit risk.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6. Competitive Differentiation<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses can differentiate themselves in a crowded market by providing BNPL. Businesses with BNPL capabilities have a competitive advantage because customers frequently favour retailers who offer flexible payment choices.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_of_BNPL_Buy_Now_Pay_Later_on_Customers\"><\/span><strong>Impact of BNPL (Buy Now, Pay Later) on Customers<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Buy Now Pay Later has changed the way customers buy products online. With the provision of pay-later services, customers are given an opportunity to buy even a high-value product immediately, without worrying about paying the full amount instantly. BNPL allows its customers to pay the payment in split or smaller instalments, thereby reducing the pressure of immediate financial repayment.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Boost the Purchasing Power<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">When you get the benefit of purchasing without paying the full amount all at once, it undoubtedly impacts the purchasing power. This is beneficial for young professionals who are just starting out and have limited funds at that time and for those who do not own credit cards. Buy now, pay later services act as a bridge of affordability between businesses and customers.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Ease of access<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Pay later services offer a seamless checkout experience to customers. The documentation and steps of approval are minimal, thereby making payments faster and stress-free.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Better Management of Finances<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As a customer, when you get the provision of paying the payment in instalments, like over a week or months, it allows you to better manage your expenses. This helps balance essential spending with discretionary purchases.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Alternative for Credit Card<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">BNPL is the best option for someone who has limited or no credit history. BNPL does not create pressure on your pocket, but in fact helps to build a positive credit profile.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Reduced Dependency on Credit Cards<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">BNPL is a safe alternative for customers who do not prefer to use credit cards and wish to avoid any high interest during credit repayment. BNPL offers an interest-free repayment option with minimal pay later service charges, as per each company.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6. Risk of Excessive Spending<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;BNPL increases affordability, and this might promote impulsive purchases. If not handled properly, customers may underestimate their cumulative payment obligations, which could result in financial distress.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>7. Transparent Payment System<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">All repayment guidelines are explained in detail before selecting the BNPL option. This aids in preserving openness throughout the repayment process. Compared to traditional credit products, users are better able to grasp their financial obligations because instalment amounts, due dates, and any late fees are made explicit beforehand.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Customer_Journey_of_BNPL\"><\/span><strong>Customer Journey of BNPL<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The BNPL customer journey is designed to be smooth, fast, and user-friendly, ensuring minimal friction from product selection to repayment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Product Finalisation&nbsp;<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The consumer chooses a product after perusing an online or physical store. BNPL availability, which offers upfront instalment alternatives, is frequently shown on product pages or during checkout.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Selection of BNPL at Checkout<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Instead of paying the entire sum at the payment stage, the customer selects the BNPL option. The available instalment plans\u2014such as pay in three, pay in four, or monthly EMIs\u2014are prominently shown.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Instant Eligibility Check<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Using simple information like a mobile number, OTP, or minimum KYC, the BNPL provider quickly determines eligibility. Usually, this procedure only takes a few seconds.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Approval and Order Confirmation<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Post confirmation, the BNPL provider, without delay, pays the entire amount to the merchant. This ensures the order is successfully executed, and the customer later receives the details of the repayment schedule.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Service Fulfillment<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Similar to a full-payment transaction, the consumer receives the product or service in accordance with customary delivery timelines.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6. Installment Repayment<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As per the customer\u2019s agreement with the BNPL provider, the repayment of the amount begins. Customers receive reminders before the actual due date to avoid late fees or penalties.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>7. Completion of BNPL Cycle<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">After all installments are successfully paid, the BNPL transaction is closed. Positive repayment behaviour may increase the customer\u2019s spending limit for future purchases.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-buy-now-pay-later-vs-credit-cards\"><span class=\"ez-toc-section\" id=\"Buy_Now_Pay_Later_Vs_Credit_Cards\"><\/span>Buy Now Pay Later Vs Credit Cards&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Though the \u2018Buy Now, Pay Later\u2019 concept seems quite similar to <a href=\"https:\/\/cashfree.com\/blog\/credit-card-processing-for-small-businesses\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=buy_now_pay_later\">credit card<\/a> EMIs, there\u2019s a fine line of difference between the two. Let\u2019s take a look at them.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><\/td><td><strong>Buy Now Pay Later<\/strong><\/td><td><strong>Credit cards<\/strong><\/td><\/tr><tr><td><strong>Annual or joining fee<\/strong><\/td><td>No<\/td><td>Zero to a few thousands depending upon the bank, waivers available<\/td><\/tr><tr><td><strong>Hidden charges<\/strong><\/td><td>Works on a highly transparent and low-cost pricing model<\/td><td>Some hidden charges may be levied on the credit card post-payment&nbsp;<\/td><\/tr><tr><td><strong>Customer credit history<\/strong><\/td><td>Not mandatory to have a good credit history&nbsp;<\/td><td>Mandatory to have a good credit history to avail an EMI option<\/td><\/tr><tr><td><strong>Adoption<\/strong><\/td><td>Only a handful of e-retailers and Fintechs offer BNPL services\/facilities<\/td><td>All major banks offer credit card and EMI facilities<\/td><\/tr><tr><td><strong>Interest-free\/EMI period<\/strong><\/td><td>Usually, the interest-free period extends upto 48 months.&nbsp;The interest rate varies depending on a variety of factors<\/td><td>Credit cards offer standard interest-free periodThe interest rate remains fixed<\/td><\/tr><tr><td><strong>Approvals<\/strong><\/td><td>Easy to get approvals<\/td><td>Comparatively difficult to get approvals<\/td><\/tr><tr><td><strong>Minimum\/maximum pay<\/strong><\/td><td>Mandatory to pay fixed EMI amounts on scheduled dates<\/td><td>Have an option of paying a nominal amount. However, this comes subjected to the imposition of heavy interest rate<\/td><\/tr><tr><td><strong>Credit limit available<\/strong><\/td><td>INR 2000 to INR 1,00,000<\/td><td>No limit. Varies with credit history of customers<\/td><\/tr><tr><td><strong>Acceptability<\/strong><\/td><td>Accepted by partner merchants only<\/td><td>Universally accepted<\/td><\/tr><tr><td><strong>Cash withdrawal<\/strong><\/td><td>Not allowed<\/td><td>Allowed with separate interest charges livied<\/td><\/tr><tr><td><strong>Add-on benefits<\/strong><\/td><td>No additional benefits&nbsp;<\/td><td>Have the option to earn cashback(s), reward points, etc.<\/td><\/tr><tr><td><strong>Interest levied upon non-payment<\/strong><\/td><td>Up to 24%<\/td><td>Up to 48%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"BNPL_vs_EMI\"><\/span><strong>BNPL vs EMI<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Buy now, pay later and EMI both offer customers the option to pay in installments. But they both work differently and offer customers payment in different formats.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>BNPL<\/strong><\/td><td><strong>EMI<\/strong><\/td><\/tr><tr><td>Approval is quick and instant&nbsp;<\/td><td>Requires a detailed check for approval<\/td><\/tr><tr><td>No paperwork needed<\/td><td>Multiple form completions and bank visits<\/td><\/tr><tr><td>Short-term instalments, with no interest<\/td><td>Longer instalments with interest<\/td><\/tr><tr><td>Ideal for mid-level purchases, like buying a television&nbsp;<\/td><td>Ideal for high-value purchases like buying a car<\/td><\/tr><tr><td>No credit card needed<\/td><td>Best for established credit card holders<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-buy-now-pay-later-pros-cons\"><span class=\"ez-toc-section\" id=\"Buy_Now_Pay_Later_Pros_Cons\"><\/span>Buy Now Pay Later: Pros &amp; Cons&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s divide this section of pros and cons into two parts &#8211;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>from a customer\u2019s point-of-view&nbsp;<\/li>\n\n\n\n<li>from a merchant\u2019s point-of-view&nbsp;&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-buy-now-pay-later-from-a-customer-s-point-of-view\">Buy Now Pay Later From A Customer&#8217;s Point-of-view<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Most people think that Buy Now Pay Later is a solution built for individuals who have a very low income and live on a pay check-to-pay check basis. That\u2019s not true.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A series of consumer researches reveal that Buy Now Pay Later is just an excellent payment solution for every budget conscious and more credit-averse individual out there. Consumers like the concept because it gives them the flexibility to buy anything and everything regardless of the price of the commodity, their income level, and credit history.   <\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-pros-of-using-buy-now-pay-later\">Pros Of Using Buy Now Pay Later<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Listed below are some benefits that Buy Now Pay Later extends to its consumers.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>1. Flexible Repayment Options<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The entire concept and meaning of Buy Now Pay Later has been built on a flexible repayment module. One doesn\u2019t need to pay the entire amount at once while making a purchase on a merchant site. They can simply choose BNPL as a repayment option at the time of checkout and convert the entire order value into small EMI portions. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They can then pay off the amount at regular intervals, interest-free, anytime between 15 days and 12 months depending on the terms defined by the BNPL service provider.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means, consumers no longer have to worry about falling short of finances or overspending their monthly budget just to buy something they want.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2. No Processing Fees<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike traditional credit systems that charge a processing fee, Buy Now Pay Later services have completely done away with that. The payment option is much more accessible and cost-effective than its counterparts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3. No Hidden Charges<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Usually, Buy Now Pay Later payment methods do not have any hidden charges or fees. Everything\u2019s made wide and clear to a consumer from the very beginning. This enables consumers to make sound decisions. However, an interest is charged in case a consumer fails to make the payment on the due date.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>4. Zero Documentation Required<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What makes Buy Now Pay Later a highly accessible option is that it requires no documentation work. Neither a consumer has to disclose their monthly income nor do they have to maintain a good credit score to avail the facility. Simply signup with a Buy Now Pay Later service provider, do a basic KYC check, and you\u2019re good to use BNPL as a payment option.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>5. Spread Out Payment Plans<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Buy Now Pay Later understands that consumers today, especially after the outbreak of the pandemic, wish to maintain some liquid cash in their pockets. They\u2019re skeptical regarding paying in full for a commodity, especially it&#8217;s of a larger ticket size.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To solve the problem, Buy Now Pay Later service providers usually create a simple payment plan for such consumers. They allow consumers to split the total amount into small, equal installments that are easy to pay.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Moreover, they automatically debit the amount from a consumer\u2019s bank account on the due date. This reduces the chances of defaults and imposition of late fee hassles.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>6. Auto Charging<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As stated above, BNPL installments are automatically deducted from the consumer\u2019s bank account on the due date. This means, consumers don\u2019t need to visit their bank branch or use online banking  to make the repayment every time the due date approaches.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-cons-of-using-buy-now-pay-later\">Cons Of Using Buy Now Pay Later<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Every pro comes with its own list of cons. Listed below are some disadvantages of using BNPL as a financing option.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>1. Overspending And Impulse Purchases<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One of the primary disadvantages of BNPL is impulse purchase and overspending. The option gives consumers the leverage to convert large amounts of payments into smaller EMIs, easing some pressure off their pockets upfront.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, it also engulfs them in to the desire to spend money on commodities that they don\u2019t want. Shopaholism might kick in, making them spend more than they can afford.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2. Interest Fees And Late Payment Penalties<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While most Buy Now, Pay Later service providers offer interest-free services to its customers, they do charge an interest on late or missed payments and insufficient funds. In most cases, a late fee is charged on a daily basis until a consumer has  enough money in their account to make the scheduled payment(s).&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Note, Buy Now Pay Later interest rates are quite high, even higher than what most credit card companies charge. This means, if a consumer misses even one payment, they&#8217;ll end up paying more in terms of interest or late fee than the item&#8217;s actual cost.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3. Rigid Payment Schedules<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another disadvantage of using Buy Now Pay Later as a payment option is that the service providers decide on the auto debit dates. This means, the consumer,&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Constantly needs to maintain cash in their account to avoid defaults<\/li>\n\n\n\n<li>Can\u2019t work around paydays to ensure all auto debits happen within a span of 2-3 days&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The only way BNPL works to their advantage is when they have a grip on their financials as well as know exactly on what date which payment will gets auto-debited from their accounts.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>4. Possibility of Bad Credit Score<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although Buy Now Pay Later doesn\u2019t help build a consumer&#8217;s credit score, it surely affects one in the case of a late or missed payment. Every defaulted payment is reported to the credit bureau which is then added to the user&#8217;s credit record.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Plus, some BNPL service providers also conduct a soft credit check, such as gathering information from a consumer&#8217;s PAN or Aadhar during KYC. Too many soft enquiries can also affect a consumer&#8217;s credit score.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>5. No Additional Perks&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike many credit cards that usually offer perks on every purchase a consumer makes, such as a cash back, a discount coupon, etc. BNPL offers no such benefits. Additionally, paying bills in full at the end of the month using a <a href=\"https:\/\/cashfree.com\/blog\/credit-card-processing-system\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=buy_now_pay_later\">credit card<\/a> also guarantees that a consumer will be able to avoid any additional interest on any of their purchases.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>6. Possibly Lower Ability to Get Other Loans<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Since Buy Now Pay Later has the ability to affect a consumer&#8217;s credit score (as stated above) this means they may also face problems while applying for a loan in the future. How a consumer uses BNPL as a payment platform and the limits on their past and current accounts play a significant role in approving or rejecting their application for a type of loan.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-buy-now-pay-later-from-a-merchant-s-point-of-view\">Buy Now Pay Later From A Merchant\u2019s Point-of-view&nbsp;<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Buy Now Pay Later is an excellent payment model for retailers as well. It enables retailers to convert high value items into affordable ones for customers and record a high conversion rate. However, Buy Now Pay Later does pose some shortcomings as well. Let\u2019s take a look at the pros and cons of BNPL for retailers.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-pros-of-using-buy-now-pay-later-1\">Pros Of Using Buy Now Pay Later&nbsp;<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Listed below are some benefits that Buy Now Pay Later extends to retailers.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>1. Higher conversion rate<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to Baymard, <a href=\"https:\/\/baymard.com\/lists\/cart-abandonment-rate\" rel=\"nofollow\">nearly 69.82% of online shoppers abandoned their cart in 2021<\/a>. While there are a plethora of reasons behind a customer leaving the site without making the purchase, nearly 7% of people do it because of lack of right payment options available at their dispose or financial crisis.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here Buy Now Pay Later helps merchants enable consumers to buy commodities of their choice in both the defined conditions. It also allows consumers to take advantage of the ongoing sale and promotional discounts on a merchant&#8217;s site while paying using BNPL. This, in turn, helps a merchant bag high conversion and low abandonment rate.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2. Wider Audience<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By splitting purchase amount into smaller monthly installments, merchants, with the help of BNPL, make big purchase shopping a lot more affordable for the consumers. For instance, a consumer can now plan to buy an iPhone 13 Pro valued at INR 1,19,000 without thinking twice using the BNPL payment option at various merchant locations, both online and offline stores.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This also means merchants can reach a wider range of audience, including the budget-constraint class.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3. Higher Average Order Value<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The average order value (AOV) refers to the average amount paid by a consumer when making a purchase on an online platform. After introducing Buy Now Pay Later as a payment option on their platform, many online retailers have experienced an increase in their AOV as high as 130%.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The reason? Smaller and spread-out payments have enhanced a consumer&#8217;s purchasing power. It has given rise to the &#8216;I want a product and I want it now&#8217; philosophy amidst consumers which, in turn, means more sales for the retailers.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>4. Improved customer experience<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A positive customer experience means high retail conversion rate. Customers are happier when they\u2019re given autonomous control over their purchases. By giving such flexibility and financial options, merchants empower consumers and hence, receive excellent customer reviews and higher conversion rate.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-cons-of-using-buy-now-pay-later-1\">Cons Of Using Buy Now Pay Later<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Just like any other payment mode, the \u201cBuy Now, Pay Later\u201d scheme also comes with its list of drawbacks. Below are some of them from a retailer\u2019s point of view:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>1. Higher merchant fees<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most Buy Now Pay Later service providers operating in the Indian market are currently charging a nominal amount per transaction to both the customers and the merchants. However, compared to traditional modes of payments, Buy Now Pay Later charges are high. They usually range between 2% and 6% of the total purchase amount.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Cashfree Payments is among a handful of payment gateway service providers that levies the <a href=\"https:\/\/blogrevamp.cashfree.com\/payment-gateway-charges?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=buy_now_pay_later\">lowest per transaction charge<\/a>.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2. Integration Challenges<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Integrating Buy Now Pay Later as a payment option involves some workaround. In most cases, it demands specialised tools and technology, which often add to the expense incurred by the retailer. Many financial experts recommend going with third-party BNPL service providers such as <a href=\"https:\/\/www.cashfree.com\/buy-now-pay-later\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=buy-now-pay-later-bnpl\/\">Cashfree Payments<\/a>, as they not only serve as a cheaper alternative but offer many other payment options as well to merchants.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-fe48e5de wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/merchant.cashfree.com\/merchants\/signup?source-action=Blog&amp;action=Sign%20Up&amp;button-id=StartNow_BlogCTA\">know more<\/a><\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3. Accreditation Challenges<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Besides the integration challenges, Buy Now Pay Later may not be a suitable option for all types of online businesses. Merchants have to meet certain requirements to start offering Buy Now Pay Later to their target audience. Moreover, businesses selling tobacco products or gaming companies are not eligible to offer the BNPL option to their customers.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>4. Encourages Consumer Debt&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another drawback of Buy Now Pay Later is that they often encourage consumers to buy more commodities than they can afford. This can put consumers into jeopardy, affect their credit scores in the case of late or missed payments, and cause merchants loss of business in the long run.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-choosing-buy-now-pay-later-service-provider-what-all-to-consider\"><span class=\"ez-toc-section\" id=\"Choosing_Buy_Now_Pay_Later_Service_Provider_What_All_To_Consider\"><\/span>Choosing Buy Now Pay Later Service Provider: What All To Consider?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Although the services rendered by most Buy Now Pay Later providers are more or less the same, here are some parameters to consider when choosing a BNPL partner.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>1. Protection&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Protection is paramount. So, when selecting a Buy Now Pay Later service provider ensure they\u2019re a certified lender. If they\u2019re not RBI certified then they must certify under whose license they are offering the services. In case they are, check if they\u2019ve mentioned the same on their app and website.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Secondly, check some basic details about the company such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Date of establishment<\/li>\n\n\n\n<li>Indian or foreign registered company<\/li>\n\n\n\n<li>Number of customers&nbsp;<\/li>\n\n\n\n<li>Social proofing<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Thirdly, most BNPL options claim no fees or zero interest, but, as a merchant, you need to understand what is the real cost involved. Even if companies say zero per cent onboarding charges or no annual fee, they are supposed to declare their IRR \u2013 Internal Rate of Return, so the merchants, for their own protection, need to make sure that the company or the app is disclosing all of these.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2. Compatibility&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Chose a Buy Now Pay Later service provider that\u2019s popular in the marketplace. This increases the chances of authenticity. Also, conduct a multi-level check before onboarding a BNPL service provider.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3. Commission&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While most Buy Now Pay Later service providers claim to not charge any interest, there&#8217;s no harm in reading between the lines. Even if the company says zero percent, check their IRR (interest rate of return) for your own protection.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-fe48e5de wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/merchant.cashfree.com\/merchants\/signup?source-action=Blog&amp;action=Sign%20Up&amp;button-id=StartNow_BlogCTA\">cashfree&#8217;s bnpl<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-shift-of-traditional-banks-towards-buy-now-pay-later-model-in-india\"><span class=\"ez-toc-section\" id=\"Shift_Of_Traditional_Banks_Towards_Buy_Now_Pay_Later_Model_In_India\"><\/span>Shift Of Traditional Banks Towards Buy Now Pay Later Model In India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Buy Now Pay Later is one of the latest emerging lending technology sectors in India. Several Buy Now Pay Later startups as well as well-established Fintechs are working their way around and testing new strategies to make this payment technique the new, widely used payment mode in the nation. Moreover, eCommerce marketplaces such as Flipkart and Amazon India have also ventured into this new payment territory.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, <strong>Simpl<\/strong> is working with approximately 2500 merchants and has a customer base of about 7 million people. It registers a compound annual growth rate of nearly 36%. According to sources, <a href=\"https:\/\/economictimes.indiatimes.com\/industry\/services\/retail\/buy-now-pay-later-set-to-surge-over-ten-fold-in-india\/articleshow\/87586258.cms?from=mdr\" rel=\"nofollow\">the Indian Buy Now Pay Later sector is expected to touch USD 50 billion by the end of FY 2026<\/a>. This indicates just how much people inclined towards the lending platform even during its infant years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Ola<\/strong>, one of the leading ride-hailing aggregators of India has also entered the BNPL arena and is offering <strong>Ola Postpaid<\/strong> services to its customers. The service enables users to <strong>pay-later on 300+ third-party platforms<\/strong> including their own.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While startups are leading the flame of adoption, traditional banks are holding back from venturing into the territory of Buy Now Pay Later payments. They fear that this might cannibalise their lucrative credit card business in some or the other way.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, some banks believe that credit cards and Buy Now Pay Later can coexist and complement each other in many ways. Banks are using BNPL to get a new set of consumers onboard that resisted credit cards.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, <strong>ICICI Bank offers in-store pay later facilities<\/strong> to its customers. This allows users to purchase high-value items and split the amount into smaller payment portions. Moreover, the bank is offering a no-cost loan product that, in turn, eases onboarding and reduces much paperwork as in the case of credit cards.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Similarly, <strong>HDFC Bank launched its FlexiPay scheme in 2018<\/strong>. It offers zero interest credit for upto 15 days with a maximum credit limit of about INR 60,000. The bank has partnered with many online retail platforms such as Myntra, Bata, OLA, MakeMyTrip, Lakme Salon, Urban Company, CureFit, etc. to extend its Buy Now Pay Later services.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Besides online retail shop owners, brick-and-mortar merchants can opt to offer BNPL EMIs at their stores via POS device providers. At present, BNPL is helping many small and medium-sized brick-and-mortar businesses recover from damage done by COVID-19 pandemic and increase sales.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The launch of <strong>Flipkart Pay Later<\/strong> and <strong>Amazon Pay Later<\/strong> also boosted the sales of the two platforms respectively, especially during the festive season sales. In 2020, Flipkart officials stated that EMI options and pay later were the highlights of their sales. <a href=\"https:\/\/storiesflistgv2.blob.core.windows.net\/stories\/2021\/11\/FINAL-Press-Release_-Flipkart-Pay-Later-Sees-Double-digit-Growth-in-Customer-Base-Crosses-42-Million-Transactions-on-Flipkart.pdf\" rel=\"nofollow\">Flipkar witnessed a 7x higher spend via pay later option along with 1.7x higher adoption of EMI schemes<\/a>. The numbers are equally staggering for Amazon Pay Later.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-buy-now-pay-later-examples-from-different-industries\"><span class=\"ez-toc-section\" id=\"Buy_Now_Pay_Later_Examples_From_Different_Industries\"><\/span>Buy Now Pay Later Examples From Different Industries<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-ecommerce-industry\">eCommerce Industry&nbsp;<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Even though multiple industrial segments are now offering Buy Now Pay Later services to their customers, it\u2019s the eCommerce that\u2019s expected to drive maximum growth.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2020 alone, <a href=\"https:\/\/cred.club\/articles\/buy-now-pay-later-fever-is-high\" rel=\"nofollow\">BNPL accounted for about 2.1% of the world\u2019s total eCommerce transactions<\/a> according to the Global Payments Report published by FIS in 2021. This figure is expected to double by the end of FY 2024 with Buy Now Pay Later holding 4.2% share in the total global eCommerce sales.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the concept of Buy Now Pay Later is also quite popular in the APAC and Americas, particularly in Australia, New Zealand, and the United States, it\u2019s gaining much momentum in the Indian region now. The number of payment service providers and Fintechs offering BNPL services are increasing at an exponential rate.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, founded in 2015, LazyPay is one of the fastest growing Buy Now Pay Later service providers in India. At present, it caters to more than 3 million Indians and can be used on over 25000 plus eCommerce sites. Simpl, ePayLater, ZestMoney, and Capital Float are other emerging Buy Now Pay Later platforms that are <a href=\"https:\/\/cashfree.com\/blog\/payment-systems-for-ecommerce\/?utm_source=blog&amp;utm_medium=organic&amp;utm_campaign=buy_now_pay_later\">boosting eCommerce businesses<\/a> and helping them increase their retention and conversion rate.&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"770\" height=\"529\" data-attachment-id=\"8424\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/companies-offering-bnpl\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/companies-offering-BNPL.png?fit=1080%2C742&amp;ssl=1\" data-orig-size=\"1080,742\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"companies-offering-BNPL\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/companies-offering-BNPL.png?fit=770%2C529&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/companies-offering-BNPL-1024x704.png?resize=770%2C529&#038;ssl=1\" alt=\"what is buy now pay later\" class=\"wp-image-8424\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/companies-offering-BNPL.png?resize=1024%2C704&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/companies-offering-BNPL.png?resize=300%2C206&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/companies-offering-BNPL.png?resize=768%2C528&amp;ssl=1 768w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/companies-offering-BNPL.png?w=1080&amp;ssl=1 1080w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">At the current pace, India is expected to clock about USD 50 billion by the end of FY 2026, a major chunk of which will be from the eCommerce industry.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-food-and-beverage-industry\">Food And Beverage Industry<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Indian online food delivery industry is booming at an exponential rate. The outbreak of the COVID-19 pandemic has further added to the industry\u2019s rapid resonance. In 2020, the industry registered a <a href=\"https:\/\/www.imarcgroup.com\/india-online-food-delivery-market#:~:text=The%20India%20online%20food%20delivery,30.1%25%20during%202021%2D2026.\" rel=\"nofollow\">revenue of about USD 4.35 billion<\/a> and is expected to grow at a CAGR of 30.1% between 2021 and 2026.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Much of this revenue comes from food delivery giants such as Swiggy, FoodPanda, FreshMenu and Zomato, especially in the metro cities of India. More so, <a href=\"https:\/\/www.livemint.com\/Companies\/OTEdrhCiBcJpLM3oSXYyEI\/Ordering-food-online-Heres-how-you-can-pay-for-it-later.html\" rel=\"nofollow\">according to Redseer, almost 75% of all the online food delivery is hosted by third-party companies<\/a>. Looking at the industry\u2019s growth rate, Buy Now Pay Later service providers such as ePayLater, Simpl, LazyPay, etc. are entering the segment and enabling merchants to offer credit to customers.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s how it works:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Download a Fintech\u2019s app that offers the Buy Now Pay Later option.&nbsp;<\/li>\n\n\n\n<li>Provide the necessary business details <\/li>\n\n\n\n<li>Register on the platform as a merchant<\/li>\n\n\n\n<li>Do a simple e-KYC, if asked\/necessary<\/li>\n\n\n\n<li>Add business bank account details to receive money<\/li>\n\n\n\n<li>Start offering BNPL as a payment option to consumer<\/li>\n<\/ol>\n\n\n\n<figure class=\"wp-block-image size-full\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"770\" height=\"529\" data-attachment-id=\"8427\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/popular-food-delivery-companies-offering-bnpl-in-india\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-food-delivery-companies-offering-BNPL-in-India.png?fit=886%2C609&amp;ssl=1\" data-orig-size=\"886,609\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Popular-food-delivery-companies-offering-BNPL-in-India\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-food-delivery-companies-offering-BNPL-in-India.png?fit=770%2C529&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/Popular-food-delivery-companies-offering-BNPL-in-India.png?resize=770%2C529&#038;ssl=1\" alt=\"what is buy now pay later\" class=\"wp-image-8427\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-food-delivery-companies-offering-BNPL-in-India.png?w=886&amp;ssl=1 886w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-food-delivery-companies-offering-BNPL-in-India.png?resize=300%2C206&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-food-delivery-companies-offering-BNPL-in-India.png?resize=768%2C528&amp;ssl=1 768w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">With more and more people opting for food delivery services and getting comfortable with the pay later concept, it won\u2019t be a surprise to see a rapid surge in the revenue that Buy Now Pay Later will register with this very segment.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-brick-and-mortar-stores\">Brick-And-Mortar Stores<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">While there has been an absolute surge in the number of people shopping for commodities online, there remains a part of the Indian society that still opts for in-store shopping. According to a <a href=\"https:\/\/in.yougov.com\/en-hi\/news\/2020\/06\/01\/almost-half-urban-indian-consumers-see-online-shop\/\" rel=\"nofollow\">survey carried out by YouGov<\/a>, shoppers in India bought more essentials by physically visiting brick-and-mortar stores and made discretionary purchases online in 2021.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consumers prefer to shop for essential goods such as fresh fruits and vegetables, beverages, and medical supplies in store, while purchasing clothes, footwear, cosmetics, gadgets and gizmos online.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s a comparative analysis of commodities bought online and offline by Indian consumers in 2021.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"770\" height=\"719\" data-attachment-id=\"8429\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/comparative-analysis-of-commodities\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/comparative-analysis-of-commodities.png?fit=1080%2C1008&amp;ssl=1\" data-orig-size=\"1080,1008\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"comparative-analysis-of-commodities\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/comparative-analysis-of-commodities.png?fit=770%2C719&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/comparative-analysis-of-commodities-1024x956.png?resize=770%2C719&#038;ssl=1\" alt=\"what is buy now pay later\" class=\"wp-image-8429\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/comparative-analysis-of-commodities.png?resize=1024%2C956&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/comparative-analysis-of-commodities.png?resize=300%2C280&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/comparative-analysis-of-commodities.png?resize=768%2C717&amp;ssl=1 768w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/comparative-analysis-of-commodities.png?w=1080&amp;ssl=1 1080w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Attributes like home delivery, easy return policy, and faster refund processing are some of the primary reasons why consumers are preferring online shopping than physical stores. However, POS (point-of-sale) lending is increasingly making things easier for buyers at the brick-and-mortar stores. Companies like LAzyPay and Kissht in the Buy Now Pay Later EMI segment are offering online POS lending services to brick-and-mortar merchants who are, in turn, helping buyers to leverage \u201cscan now, pay later\u201d services of these companies.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As of 2021, there has been a significant increase in footfall at brick-and-mortar stores, especially in the Tier I and Tier II cities after the introduction of the Buy Now Pay Later payment option. Despite the pandemic causing a major financial crisis in the lives of many Indians, BNPL is enabling them to live their lives normally and stay financially stable.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-education\">Education<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The rise in the penetration of the internet in Indian households and easy access to innovative technologies had already set a platform of growth for the education sector pre-pandemic. COVID-19 just helped accelerator this growth. After the United States, India stands as the second-largest market for e-learning platforms.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Probably the reason why companies like Byju&#8217;s, Unacademy, Udemy, etc. are flourishing at such a pace. Moreso, the industry is touted to touch USD1.96 billion by the end of 2021 and showcase a further growth of USD 2.28 billion between 2021 and 2025.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the pandemic also highlighted many inefficiencies of the online education system. For instance, students hailing from low-income backgrounds cannot afford a device to access the online learning classes. Many others cannot afford to even register for online classes due to financial constraints.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-3 is-layout-flex wp-block-gallery-is-layout-flex\">\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"770\" height=\"529\" data-attachment-id=\"8431\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/popular-online-education-companies-offering-bnpl-in-india-2\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-online-education-companies-offering-BNPL-in-India-1.png?fit=886%2C609&amp;ssl=1\" data-orig-size=\"886,609\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Popular-online-education-companies-offering-BNPL-in-India\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-online-education-companies-offering-BNPL-in-India-1.png?fit=770%2C529&amp;ssl=1\" data-id=\"8431\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/Popular-online-education-companies-offering-BNPL-in-India-1.png?resize=770%2C529&#038;ssl=1\" alt=\"what is buy now pay later\" class=\"wp-image-8431\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-online-education-companies-offering-BNPL-in-India-1.png?w=886&amp;ssl=1 886w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-online-education-companies-offering-BNPL-in-India-1.png?resize=300%2C206&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Popular-online-education-companies-offering-BNPL-in-India-1.png?resize=768%2C528&amp;ssl=1 768w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/figure>\n<\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The Buy Now Pay Later business model is serving a solution to such challenges. It&#8217;s helping,<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Online education platforms onboard more students<\/li>\n\n\n\n<li>Students to access better education services even during financial crisis<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Leading education institutions and Edtechs are increasingly collaborating with Fintechs to offer flexible payment solutions like BNPL to students and their parents to avail both online and offline courses. Rather than asking for fees in lump-sum, institutions are now enabling students to pay course fees in smaller, more convenient installments at zero interest.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-top-buy-now-pay-later-service-providers-in-india\"><span class=\"ez-toc-section\" id=\"Top_Buy_Now_Pay_Later_Service_Providers_In_India\"><\/span>Top Buy Now Pay Later Service Providers In India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While the COVID-19 pandemic has brought many hardships to the global population, it has in fact, also helped them explore new avenues that most believed were roads inaccessible to humans. Buy Now, Pay Later is one such concept that\u2019s unearthed it\u2019s true potential during the pandemic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Many Fintechs and other financial institutions are leveraging the technology and have built empires solving the cash-crunch problems of millions of individuals. At present, there are only a handful of companies offering BNPL services in India. However, the numbers are expected to significantly increase in the coming half a decade.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s a list of some top Buy Now Pay Later players operating in India.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-simpl\">Simpl<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">At present, Simpl tops the list of major challengers operating in the BNPL payment segment in India. Established in 2015, it\u2019s a full-stack, mobile-first Buy Now Pay Later platform that offers on-the-spot credit facility to individuals and empowers merchants with higher conversion rate.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/BtjAQl7xd4fTwPcZN5DSY2njYyk-5WGHScyFLL3CadzdMtUK5b9kYFnN5aK8OxTWcwnhe9cAItJ0GWTQoKT-mABPEYYZswlxEr7Hytyn_slUQv85tc7FQPh4pfW5Onz-854BGZBd\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">As of date, Simpl has:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>7 million active users<\/li>\n\n\n\n<li>Has processed over 49 million transactions&nbsp;<\/li>\n\n\n\n<li>Available across 10,000 plus merchants&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For users, Simpl offers the following benefits,<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>One-tap payment process<\/li>\n\n\n\n<li>Current limit offered INR 20,000<\/li>\n\n\n\n<li>Access to consolidated view of expenses&nbsp;<\/li>\n\n\n\n<li>Easy 15-day repayment option<\/li>\n\n\n\n<li>Zero-interest per transaction&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">From a merchant\u2019s point of view, Simpl offers the following benefits,<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Seamless integration across various platforms&nbsp;<\/li>\n\n\n\n<li>2x increase in customer retention frequency<\/li>\n\n\n\n<li>Zero percent transaction failure rate<\/li>\n\n\n\n<li>20% growth in basket size&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The Buy Now Pay Later platform has raised USD 71.7 million in funds till date from many leading global investment firms including IA Ventures, Green Visor Capital and Valar Ventures. Simpl also saw an uptick in its daily essential transactions in 2021 by almost 50% as compared to the pre-Covid times through online orders. It also registered a 1.5x increase in its average ticket size in 2020.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-zestmoney\">ZestMoney<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">After Simpl, ZestMoney is touted as one of the fastest growing pay-later Fintechs in India. Founded in 2015, the company enables users to easily shop online and offline, and pay later in 3 or 4 bite-sized installments at zero percent interest.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/YyrAxUUXjU8DeNvQZkK18YZhWhxPQaQl_MwjzxVzp4e73bb3ap3oVRKNpPmP8RaGNwUgxKYArJsxOH88z75phCj8wRfuU7tsy70OxQAhvGu0_bbeiL2OBk5JWb8MAAlFYPSB6pJ5\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Contrary to its counterparts, Zestmoney makes use of mobile technology, digital banking system, and artificial intelligence (AI) to provide access to funds to individuals who otherwise cannot get loans through traditional mediums.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With ZestMoney, individuals get the following benefits&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No joining fees and no hidden charges<\/li>\n\n\n\n<li>Simple account creation and KYC process&nbsp;<\/li>\n\n\n\n<li>Interest-free installment option with select merchants for upto 6 months of tenure<\/li>\n\n\n\n<li>Zero percent processing charges<\/li>\n\n\n\n<li>Personalized credit limit of up to INR 2,00,000<\/li>\n\n\n\n<li>Accepted across 10,000 online and 75,000 brick-and-mortar stores<\/li>\n\n\n\n<li>Pay for big-ticket purchases such as flights, furniture, etc.&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">As of date, ZestMoney has approximately 11 million active customers and is available across 2,50,000 merchants. It has also raised USD 118.4 million in funding till date and is backed by many leading investors including Goldman Sachs, Omidyar Network, Naspers, and Coinbase.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2020, ZestMoney registered an approximate growth of 50% in the average ticket size of Edtech transactions, 30% and 15% in the case of personal loans and e-commerce respectively.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-lazypay\">LazyPay<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Consider LazyPay as a strategic amalgamation of services offered by Simpl and ZestMoney. Users can use LazyPay to easily shop online and clear their dues either every 15 days or convert the entire amount into no-cost equated monthly installments.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/lPLLTXaaP2AvdNLhvb2879K-d9VMoEtV5ZNOx5yjJ-Qbvqv_nIaNnhJfPSxBDoqroTn7AaSQ6UZMo7eRJc6JxBStz0FCgyKzv_zmJufuqecmNgHErXxaSWcuWzFM8rk3KaeSHD5M\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Listed below are some other benefits offered by the pay-later startup,<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>One-tap payment processing<\/li>\n\n\n\n<li>Settle accounts via affordable Instalment plans<\/li>\n\n\n\n<li>Personalized credit limit of up to INR 1,00,000<\/li>\n\n\n\n<li>Accepted across 25,000 online merchants&nbsp;<\/li>\n\n\n\n<li>Pay for big-ticket purchases upto available credit limit&nbsp;&nbsp;<\/li>\n\n\n\n<li>Paperless credit disbursal with 100% digital process<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">As of date, LazyPay has processed approximately USD 1 million plus transactions, disbursed over USD 500 million in credit, and has nearly 4 million active users.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In 2021, Lazypay saw an increased demand for travel, entertainment, and food &amp; beverage sectors, showcasing a growth of over 300% compared to 2020. It also saw an uptick of about 70% in customer acquisition in 2021.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-flexmoney\">Flexmoney<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Operating as InstaCred, Flexmoney offers a 360 degree instant cardless credit platform to the Indian audience. The Fintech enables trusted banks and lenders to easily offer lender-branded, instant credit options across a network of online platforms.&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/P1TPC23e7sGWfTfut8rKB8YFbYGOff-8YuukX2ovDeSVxQX_gDzsDiWrUWyOquEcXeNTajbVI5JNuGLtURpDOdIOXGaMUHAYa6T8he2X5Wqw-KPQZM19X4WJ-8qmS-SroM7RiftB\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Flexmoney offers flexible payment options similar to LazyPay. Users can choose between paying full amount or convert it into equated monthly installments. However, the startup does not disburse any finance from its own pocket. Rather, it enables banks and lenders to use it\u2019s platform to reach a wider audience and offer Buy Now Pay Later services.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Flexmoney is used by 10,000 plus merchants in India. Moreover, it has partnered with 6 major lenders that have processed over 25 million plus pre-approved \u2018cardless\u2019 EMI credit lines till date. Incorporated in 2015, the firm has bagged USD 351 million in funding in India.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-epaylater\">ePayLater<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Another Fintech established in 2015, ePayLater too offers an instant line of credit to the Indian population to make online and offline purchases.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/UaNP2P295zKUUObnBz8HZXNaiRVakLB4XqdtmzClJDLvlVdNhw3URWVRMLtj1_HO1__whLajSF3qR4otIZEhIfs-rY0SfDC-UhLPlubz2X28Pmq_X_tIdim1gAmk3KfEyotQqfWp\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">With ePayLater, consumers avail the following benefits.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>One-tap checkout process<\/li>\n\n\n\n<li>Access to credit line between INR 25,000 and INR 25,00,000&nbsp;<\/li>\n\n\n\n<li>Access to consolidated view of expenses&nbsp;<\/li>\n\n\n\n<li>Easy 14-day repayment option<\/li>\n\n\n\n<li>Zero-interest per transaction&nbsp;<\/li>\n\n\n\n<li>Access to a wide range of commodities&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The Buy Now Pay Later Fintech has disbursed approximately USD 89.8 million in credit line since 2017 in the food and groceries retail segment alone. It has also raised USD 15.7 million in funding to date. ePayLater is now planning to make an entry into the B2B and small-and-medium enterprises (SMEs) lending segment.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Buy Now Pay Later or BNPL payment sector may be currently in its nascent stage in India. However, it\u2019s touted to be the next big thing disrupting the entire payment industry. More and more Fintech companies along with NBFCs are developing state-of-the-art Buy Now Pay Later products to cater to the increasing cash-crunch-management needs of the Indian population.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Many payment firms are also planning to expand their product portfolios in this very segment. And why not! The segment is proving to be a win-win proposition for everyone including the lenders and the consumers.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1646221397863\"><strong class=\"schema-faq-question\">Does Buy Now Pay Later check credit history?<\/strong> <p class=\"schema-faq-answer\">No. Buy Now Pay Later doesn\u2019t check your credit history. The entire concept of BNPL has been drafted on the lines of zero documentation and zero credit score analysis. You can avail Buy Now Pay Later services even if you have a bad credit history. Call it an excellent payment solution for every budget conscious and more credit-averse individual out there.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1646221419569\"><strong class=\"schema-faq-question\">What happens if you don\u2019t pay your Buy Now Pay Later amount?<\/strong> <p class=\"schema-faq-answer\">If you don\u2019t pay your BNPL amount on time, you\u2019ll be charged a late-payment interest. In most cases, a late fee is charged on a daily basis until you repay the amount. Further delay in the payment can also lower your credit score which can make it difficult for you to get a loan in future.<br\/><br\/>Furthermore, Buy Now Pay Later interest rates are quite high. Ideally, they\u2019re higher than what most credit card companies levy. So, avoid missing any payments. Try to set an auto-debit on your card against BNPL payments and maintain enough balance for BNPL auto-deductions.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1646221451286\"><strong class=\"schema-faq-question\">Can you buy something with PayPal and pay later?<\/strong> <p class=\"schema-faq-answer\">Yes. <a href=\"https:\/\/www.paypal.com\/us\/digital-wallet\/ways-to-pay\/buy-now-pay-later#:~:text=Buy%20now%2C%20pay%20later%20with,and%20it's%20backed%20by%20PayPal.\">PayPal offers a short-term, interest-free, buy now and pay later service<\/a> to its customers &#8211; Pay in 4. <br\/>Consumers,\u00a0<br\/>&#8211; Can avail Pay in 4 service across millions of online stores\u00a0<br\/>&#8211; Split the entire purchase amount into 4 interest-free payments with no late fee charges<br\/>&#8211; Don\u2019t need a good credit history to avail the service<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1646221478061\"><strong class=\"schema-faq-question\">Is Buy Now Pay Later similar to EMI?<\/strong> <p class=\"schema-faq-answer\">Yes, BNPL is a type of instalment loan like EMI. It too enables you to split your purchase amount into smaller instalments and pay at a later stage. While EMIs are mostly associated with credit\/debit cards, the only points of difference between BNPL EMI and credit\/debit card EMI are as follows.\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"636\" height=\"300\" data-attachment-id=\"6558\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/buy-now-pay-later-bnpl\/screenshot-2022-03-02-at-5-17-00-pm\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-02-at-5.17.00-PM.png?fit=636%2C300&amp;ssl=1\" data-orig-size=\"636,300\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"BNPL vs EMI\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-02-at-5.17.00-PM.png?fit=636%2C300&amp;ssl=1\" class=\"wp-image-6558\" style=\"max-width:100%;\" src=\"https:\/\/i0.wp.com\/cashfree.com\/blog\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-02-at-5.17.00-PM.png?resize=636%2C300&#038;ssl=1\" alt=\"BNPL vs EMI\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-02-at-5.17.00-PM.png?w=636&amp;ssl=1 636w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-02-at-5.17.00-PM.png?resize=300%2C142&amp;ssl=1 300w\" sizes=\"(max-width: 636px) 100vw, 636px\" \/><br\/><br\/><\/p> <\/div> <\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/merchant.cashfree.com\/merchants\/signup?source-action=Blog&amp;action=Sign%20Up&amp;button-id=StartNow_BlogFooterCTA\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"770\" height=\"107\" data-attachment-id=\"29027\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/affiliate-program-for-website-development-agencies\/footer-common-image\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?fit=1258%2C174&amp;ssl=1\" data-orig-size=\"1258,174\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Footer Common Image\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?fit=770%2C107&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?resize=770%2C107&#038;ssl=1\" alt=\"\" class=\"wp-image-29027\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?resize=1024%2C142&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?resize=300%2C41&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?resize=768%2C106&amp;ssl=1 768w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?resize=1200%2C166&amp;ssl=1 1200w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2025\/03\/Footer-Common-Image-.webp?w=1258&amp;ssl=1 1258w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Buy Now Pay Later (BNPL) is a payment method that is gaining popularity in today\u2019s time; it is a highly convenient payment option, essentially reducing a borrower\u2019s financial burden by offering no-cost EMIs. This innovative payment method was projected to reach a whopping $560.1 billion in 2025, which is a 13.7% year-over-year increase. The users<\/p>\n","protected":false},"author":29,"featured_media":6566,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1,1383],"tags":[5112,5523,1379],"class_list":["post-6552","post","type-post","status-publish","format-standard","has-post-thumbnail","category-all","category-payments","tag-bnpl","tag-buy-now-pay-later","tag-online-payment-gateway"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>BNPL: What is Buy Now Pay Later, How it Works?<\/title>\n<meta name=\"description\" content=\"Buy Now Pay Later (BNPL) is a new-age payment mode that enables buyers to purchase a product or service and pay for it later in installments.\u00a0\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cashfree.com\/blog\/buy-now-pay-later-bnpl\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"(BNPL) Buy Now, Pay Later- An Insanely Exhaustive Guide (2022)\" \/>\n<meta property=\"og:description\" content=\"Buy Now Pay Later is a highly convenient payment option that&#039;s reducing a consumer&#039;s financial burden &amp; offering no-cost EMIs. 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The entire concept of BNPL has been drafted on the lines of zero documentation and zero credit score analysis. You can avail Buy Now Pay Later services even if you have a bad credit history. Call it an excellent payment solution for every budget conscious and more credit-averse individual out there.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.cashfree.com\/blog\/buy-now-pay-later-bnpl\/#faq-question-1646221419569","position":2,"url":"https:\/\/www.cashfree.com\/blog\/buy-now-pay-later-bnpl\/#faq-question-1646221419569","name":"What happens if you don\u2019t pay your Buy Now Pay Later amount?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"If you don\u2019t pay your BNPL amount on time, you\u2019ll be charged a late-payment interest. In most cases, a late fee is charged on a daily basis until you repay the amount. Further delay in the payment can also lower your credit score which can make it difficult for you to get a loan in future.<br\/><br\/>Furthermore, Buy Now Pay Later interest rates are quite high. Ideally, they\u2019re higher than what most credit card companies levy. So, avoid missing any payments. Try to set an auto-debit on your card against BNPL payments and maintain enough balance for BNPL auto-deductions.\u00a0","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.cashfree.com\/blog\/buy-now-pay-later-bnpl\/#faq-question-1646221451286","position":3,"url":"https:\/\/www.cashfree.com\/blog\/buy-now-pay-later-bnpl\/#faq-question-1646221451286","name":"Can you buy something with PayPal and pay later?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes. <a href=\"https:\/\/www.paypal.com\/us\/digital-wallet\/ways-to-pay\/buy-now-pay-later#:~:text=Buy%20now%2C%20pay%20later%20with,and%20it's%20backed%20by%20PayPal.\">PayPal offers a short-term, interest-free, buy now and pay later service<\/a> to its customers - Pay in 4. <br\/>Consumers,\u00a0<br\/>- Can avail Pay in 4 service across millions of online stores\u00a0<br\/>- Split the entire purchase amount into 4 interest-free payments with no late fee charges<br\/>- Don\u2019t need a good credit history to avail the service","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.cashfree.com\/blog\/buy-now-pay-later-bnpl\/#faq-question-1646221478061","position":4,"url":"https:\/\/www.cashfree.com\/blog\/buy-now-pay-later-bnpl\/#faq-question-1646221478061","name":"Is Buy Now Pay Later similar to EMI?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes, BNPL is a type of instalment loan like EMI. It too enables you to split your purchase amount into smaller instalments and pay at a later stage. While EMIs are mostly associated with credit\/debit cards, the only points of difference between BNPL EMI and credit\/debit card EMI are as follows.\u00a0<br\/><br\/>","inLanguage":"en-US"},"inLanguage":"en-US"}]}},"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9MjXo-1HG","jetpack_likes_enabled":false,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2022\/03\/BuyNowPayLater-01.png?fit=1080%2C720&ssl=1","_links":{"self":[{"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/posts\/6552","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/comments?post=6552"}],"version-history":[{"count":51,"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/posts\/6552\/revisions"}],"predecessor-version":[{"id":31639,"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/posts\/6552\/revisions\/31639"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/media\/6566"}],"wp:attachment":[{"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/media?parent=6552"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/categories?post=6552"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogrevamp.cashfree.com\/wp-json\/wp\/v2\/tags?post=6552"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}