What Is 'Buy Now Pay Later' Model Of Shopping, Find Out Its Benefits

Now for shopping, the 'Buy Now Pay Later' (BNPL) model is being offered. Many e-commerce websites and start-ups are offering their customers the option of BNPL today.

Representative Image

New Delhi: With the changing times, a big change in the shopping model is also happening. For delayed payment options (read EMI) earlier Credit Card was the major source, now it is slowly being replaced by the 'Buy Now Pay Later' (BNPL) model.

Many e-commerce websites and start-ups, including Amazon and Flipkart, are offering their customers the option of BNPL today. In which you can buy goods in advance and pay for them later.

Many third-party service providers also offer customers the BNPL options. Sezzle, Afterpay, Quadpay, Klarna and PayPaybright are the most commonly used third-party service providers.

These third-party service providers facilitate converting your shopping payments made on the e-commerce website to EMI. While some third-party service providers take interest from their customers for this, some service providers offer this facility without any charge. 

KYC Completion 

For this, you need to complete your Know Your Customer (KYC) on these websites and start-ups. For which you have to submit your PAN card and Aadhaar card details. 

Companies give 15 to 45 days to customers who opt for BNPL. You can pay your shopping amount together or in EMI if you like. However, whether you will be able to use this feature or not depends on many things. Whether you will be given goods on credit is decided by the algorithms process. 

BNPL's Business Model?

Their business model is simple. Like you did any shopping for Rs 1000. Now you choose the third-party service provider and choose the option to pay this amount in 4 installments. The third-party service provider will pay Rs 940 to the e-commerce website. At present, the third-party service provider gets a commission of 6 percent from these e-commerce websites.

Which goods you bought for Rs 1000, the third-party service provider will pay Rs. 940 to the e-commerce website after deduction of 6 percent commission. After which you will pay Rs. 1000 to the third-party service provider in 4 different installments. While your shopping will be easier in this process, on the other hand, the third-party service provider will also get the benefit of Rs 60. 

E-commerce Websites Offer BNPL 

According to market experts, the launch of Amazon Pay Later and Flipkart Pay has helped them a lot in increasing their sales. Fintech, PhonePe, and Paytm have also entered the BNPL area. Similarly, Ola has also launched its BNPL facility, Ola Postpaid.