Buy Now Pay Later is a common term we hear nowadays in the digital finance world. BNPL service is taking over credit cards and personal loans at an alarming rate and is said to be the most preferred payment option, and there are several reasons for it.
Buy Now Pay Later service came into the picture when people found it difficult to repay the installments. They took on a credit card due to the high-interest rate charged by various banks and financial institutions. Buy Now Pay Later is a service wherein a customer can buy any product with the help of the vendor or take a small loan and repay the principal amount without any interest in a series of installments. An interest fee is charged only if the customer is not able to pay any of the installments, and this fee is pre-decided between the vendor and customer at the time of availing of this service.
An increase of 30% in BNPL adoption has been seen since 2019.
What is the future of Buy Now Pay Later payment system?
- More Adoption
It has been seen that more and more people are getting into Buy Now Pay Later service. The primary reason being the interest-free repayment system; however the adoption rate increased by more than 30% when the covid hit. The reason is that many people lost their jobs during the covid time and wanted a flexible and easy option to pay for their goods and services. Buy Now Pay Later offered both these options, and the whole process of getting approvals and repayment is too easy for people.
- Secure Transactions
This is one of the primary reasons why Buy Now Pay Later service will be leading the digital finances. All the transactions done through Buy Now Pay Later service are encrypted, and no third-party person can eavesdrop or steal any data. This makes the transactions secure, and customers need not worry about their data privacy. Moreover, customers need to carry hard cash or a physical card while availing of this service which are likely to be stolen. If a smartphone is stolen, various locks must be opened before someone can access the Buy Now Pay Later service for any illicit use, making it more secure.
- More Businesses getting into Buy Now Pay Later service.
Businesses have started to note that customers who use the Buy Now Pay Later service as a payment system tend to have better purchasing power. Their order value is 20% to 30% higher than customers using other payment methods. Due to this fact, businesses are giving more and more offers for customers who use Buy Now Pay Later as a payment option, and customers, in turn, are saving huge amounts of money.
- Easy to understand GUI
In today's time, most people have a smartphone equipped with an internet connection. For running Buy Now Pay Later service, all a user needs are the mentioned system. The application for BNPL is made in such a way that people who are not tech savvy can also use it without any prior experience. The security on these applications is well tested, and no one can eavesdrop, thereby maintaining users data privacy.
- Low Customer Acquisition Cost
Businesses have stated that since Buy Now Pay Later service came into the picture, customers have got better purchasing power. This has led to lower customer acquisition costs for businesses, thereby making good margins for them. The repeat order value for customers using Buy Now Pay Later service is also quite high.
- Replacement of credit cards
Many financial analysts are predicting that Buy Now Pay Later service will overthrow credit cards for several reasons. Primarily credit cards have a huge interest rate for any amount taken by the customer, while Buy Now Pay Later service has zero interest rate on the borrowed amount. Secondly, the customers need to keep their credit cards safe and should have them handy at all times if they are to make a payment, while for Buy Now Pay Later service, all a customer needs is his smartphone and interest access which is quite common in today’s time.
If you have still not registered for this service, now is the right time as many businesses are giving some good offers which will help you save a good amount of money. Considering all the points and seeing how Buy Now Pay Later service is being adopted by the masses, BNPL service will surely be at the top of digital finance in the coming years. There are currently more than 100 BNPL service providers around the world, and one must choose the right one considering all of the above points.
