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Buy now pay later is on the rise –  How and Why?

Buy now pay later is on the rise - How and Why?

The invention of buy now pay later scheme took place in 2014 at the financial technology industry. The constant change in technology has taken the buy now pay later industry to a new level. The online shoppers are set to surge over the buy now pay later scheme in their payment transactions, which is expected to rise by ten folds within a few years. This is the perfect time when buy now pay later, no credit check; BNPL got popularised worldwide since the retail and eCommerce stores are returning to business after the dreadful pandemic. On the other hand, the common man is yet to recover fully from the financial crisis caused by Covid-19, and for whom buy now pay later no credit check,BNPL is not less than a surprise gift.

During the pandemic, most of the people have lost a major part of their savings and credit scores in the run for existence hence getting services like buy now pay later no credit check, BNPL will enable them to procure things of their needs irrespective of the cost and their shattered credit scores. The BNPL service is considered a better alternative with banking services or credit cards for the customers since it is easily approved even with a low credit score. The e-commerce business house partners with any banking or any financial organization to cater BNPL service to the customers who make any purchase at their website.

The customer will select the pay later option during the payment process and complete the purchase. The total amount of purchase will be later repaid by the customer in split payments within a time period of weeks or months. The first-time users of BNPL need to complete their KYC to get the approval to seek a credit facility. The young generation is more fascinated by the BNPL scheme, which seems them more user-friendly and flexible.

Causes for the rise of BNPL scheme

There are several factors for the gradual rise of buy now pay later credit schemes over existing credit cards. The main reasons for the rise of BNPL is mainly due to its simplicity, flexibility, no credit checks, without or with low-interest rates, and easy approval process.

Since the Covid-19 pandemic has greatly influenced online shopping among customers, the demand for easy loan has diverted many customers towards the BNPL scheme. It is easier to get the BNPL approved, but it is very difficult for any person to get hold of the first credit card when there is no credit history or poor credit score. Even getting hold of a credit card is difficult for a non-salaried person or whose application has been rejected due to some technical issues. The credit limit in BNPL gradually increases with the repayment status of the customer using the facility. The BNPL scheme is transparent and without interest charges if the installments are strictly paid on time without any delay. The other reason for the rise of BNPL is high customer engagement and the trust building with new BNPL service providers.

BNPL is in the pursuit of introducing new categories, including health, travel, and government payments since it has saturated the core industries. BNPL products are easily accessible at the point of sale at retail outlets or at e-commerce checkout with the least paperwork. The process of getting approval for credit cards after the financial background check of the credit card applicant by the credit card-providing bankers has contributed to the gradual rise of BNPL across the world. The current strategy of credit card bankers to approve credit cards for prime customers, along with high-interest rates and hidden costs, has paved the way for BNPL to rise easily over credit cards. The greatest threats of possessing credit cards have been perceptively taken care of by BNPL service providers by offering low to zero interest cost loans and ignoring the credit scores. The option of the BNPL scheme is liked by many for its expanded credit budget and convenience of paying back in split payments within a suitable time period.

The use of digital-backed BNPL service is the best option for carrying out online shopping in the ever-developing technology era. The more and more young generation are being attracted to the newly launched electronic gadgets which might have been difficult to obtain so easily without the presence of schemes like buy now and pay later. Moreover, the provision of split payments in easy installments ensures customers pay back the purchase amount without any financial crunch. The BNPL scheme encourages people to go more shopping without the fear of overbudgeting, poor credit score history, or no money in their pocket. Though the BNPL service, which is on the riding trend, is considered to be much beneficial for the customers, efficient in financial management, and capable of repaying the amount within the stipulated time, the probability of creating a debt trap ahead of the borrowers cannot also be ruled out in the near future, due its limitless credit facility.

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