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Future Pay

   April 10th, 2023

What is “buy now pay later”?

Buy Now Pay Later is a popular payment method in India. It is used by consumers and merchants alike. Buy Now Pay Later is a type of deferred payment plan that allows you to pay for your purchase in installments or at the time of delivery. It is a great way to save money on your purchases by paying cash or installments. This saves money on interest, and customers get to choose when the customer wants to pay off their balance.

Are there risks involved for the consumer, merchant and the financier?
There are many risks involved for the consumer, merchant and the financier.
The consumer risks mainly include:

  • The possibility of not getting their purchase at all. This happens when they fail to pay the balance on time.
  • The possible loss of their money because they cannot afford to pay it back.
  • The possibility that they may have to pay more than what was agreed upon at the beginning of the loan.

Merchant risk includes:

  • The possible loss of reputation by not following through with their end of the bargain with their customers.

How does it benefit the consumer ?

Buy now, pay later can benefit the consumer in a variety of ways.

  1. it allows consumers to choose between a range of payment options that suit their needs. For example, if a consumer plans on buying a car and needs to pay for it within 12 months and wants an interest-free loan, buy now, pay later is the ideal option.

  2. It gives consumers access to a wide range of products and services at competitive prices. If a consumer wants to buy a new computer or phone but can’t afford it right now, buy now, pay later is an option that will allow the consumer to do so while also saving money on interest payments and fees.

  3. It provides greater flexibility for consumers who are unable to put down large amounts of cash up front. This includes students who may not have enough money in their bank account at the time of purchase and others who may be unemployed or jobless for an extended period of time.

  4. It enables consumers to build credit history by making regular payments on products they have purchased with no interest charges on the balance until such time as they are able to repay the balance in full without incurring any additional fees or charges from the store or retailer selling them the product.

Does Buy Now Pay Later help improve the consumer's credit score?

yes, it does. Buying things on a deferred payment plan can help consumers build their credit and keep it in good standing. By paying off their balance each month, they are not borrowing money and paying interest while they build their credit history.

Buy Now Pay Later can also help the consumer avoid the negative effects of high interest rates. If a consumer has the cash available to pay for something right now but isn’t sure when they’ll be able to do so, buying now will give them more flexibility to use that money elsewhere like paying down debt or saving for an emergency expense.

How can Consumer Operate Buy now pay later?

There are two types of consumer operated buy now pay later programs:
The seller pays for the item and then later sends the consumer an invoice for what they paid for it. The seller will cover the cost of shipping and handling, as well as any other fees associated with selling an item on eBay. Consumers don’t have to worry about paying anything until after they receive their item.

What are the benefits for Merchants / E-Commerce players / OTB?
There are many benefits for merchants who choose to use an e-commerce platform. By using an e-commerce platform, merchants can reach a larger audience with their products and services. Additionally, e-commerce platforms can provide merchants with valuable data about their customers, which can be used to improve the merchant’s business. Finally, e-commerce platforms can help to reduce the costs of doing business by providing merchants with discounts on shipping and other services.

Is buying now pay later profitable for the lender ?

Buy now pay later schemes are becoming increasingly popular, but are they actually profitable for the lender? In theory, these schemes should be highly profitable for the lender, as they are essentially lending money interest-free. However, in practice, there are a number of factors which can eat into profits. First of all, many people who sign up for these schemes end up defaulting on their payments, meaning that the lender does not recoup the money that they have lent out. Secondly, the administrative costs of running a buy now pay later scheme can be quite high, particularly if there is a large number of customers using the scheme. Overall, while buy now pay later schemes may be initially profitable for the lender, there are a number of factors which can eat into profits in the long run.

BNPL is an innovative product which is a win-win for both the consumer and the merchant. It needs a thorough understanding of the system to use it wisely.

Since BNPL is a marketing tool rather than a lending product, Communication is a key pillar of marketing. Thus CPaaS which indicates communication platform as a service and encompasses all forms of customer digital communications, becomes the pivotal technology and comes at the center of this BNPL process flow.

CPaaS helps stakeholders

  • In communicating constantly with the customer
  • Informing customers about the best offers available for them
  • Making faster document exchange
  • Invoice and other document sharing online
  • Live service chat for quick solutions
  • Enabling after sales services
  • Cross sell and upsell the linked products
  • Sharing Information and invitation about festival sale
  • Loan approval and pre-approval information sharing
  • Repayment reminders

Know More about CPaaS and avail Pinnacle services

Flexible pricing for Businesses of all sizes. Contact us to know our country wise pricing models

Click to Explore PWS (Demo)

  1. Talk to us about your business requirements
  2. Get strategic and creative advice 
  3. Discuss custom technical solution
  4. Contact us

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