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Pro Tips on how to get a home insurance in Dubai in 5 easy steps

Buying home insurance in Dubai is not rocket science! It requires a little time and effort on your part. As you know, experts recommend property insurance in Dubai as a shield against unforeseen mishaps and situations including natural calamities, accidents, damages, mishaps, fires and theft. Home insurance policies in Dubai offer financial coverage for not only replacing valuables and other necessities but also finding temporary accommodation, and the costs of repairing the home.

Here are some valuable tips on getting property insurance in Dubai:

Read the terms and conditions

It is not all about the home insurance cost in Dubai. Do not be swayed only by a lower premium. Read all the terms and conditions carefully, noting all the exclusions and inclusions along with other conditions for coverage. Check for clauses relating to water, fire and accidental damage along with liabilities for the landlord’s property (in case you are a tenant in Dubai) and also public liability along with costs of temporary accommodation. The contents insurance policy will offer coverage for things within the home including furniture, storage items, garden décor items and others within the premises. All residents in the UAE should check the coverage amount. Try and go for a comprehensive plan that has coverage for personal legal costs/liabilities, alternative or temporary accommodation and loss of rent as well.

Analyze the cost and coverage ratio

Analyze not only the home insurance cost in Dubai, i.e. the premium payable for the policy, but also the coverage it offers. The annual premium must be commensurate with the coverage that you receive for the property, valuables, items within it and emergency repairs or services.

Products Purchased Later Insurance Plans

This type of insurance mainly deals with the estimated total value of the contents in the home instead of individual things. If a person buys any new product and the content value is still within the insured one, then no additional insurance costs will be needed. However, some companies insist that if the purchased items exceed a certain percentage of the sum insured, then the company needs to be intimated for including the same within the coverage amount. It may necessitate the payment of added charges as a result.

Aim for an accurate valuation

While providing the valuation figures for your property ensure that you are absolutely spot-on. Your premiums will depend on the property valuation. If you overestimate this figure, then your premium amount will naturally be higher as a result. Simultaneously if you understate this figure, then you will get lower compensation from the insurer in case of a claim. Hence, do your home valuation carefully.

Skip the land price

While analyzing home valuation and all the contents, do not add the land price to the same. This will lead to a higher valuation than necessary and add to your payable premium.

These are the 5 steps that you should follow for seamlessly getting your Dubai home insurance plan sorted. Make sure that you consult a good insurance broker in this regard. This will help you know more about the best plans for home insurance in Dubai, their features, comparisons and also other insights that you will not find elsewhere. Hence, consulting an insurance broker is a must for getting the best home insurance plan.

Buy Bath Towels of Different Sizes Online at the Best Price

Why choose a specific towel and not just any towel?

There are as many types of towels as there are varying types of requirements. There is a different material and size for a typical need, and so a gigantic bath sheet must be picked to cover oneself well after or before a bath. It is not totally similar to an everyday bath towel, which might differ in size and material. In order to buy bath towels online, these factors have to be considered to make sure the best towel is bought.

Keeping a tab on the material of the towel to make a pick

Although cotton towels might be an age-old, all time and highest-selling towel type, other materials are used to make towels for various purposes. Like synthetic microfibers, bamboo, cotton-polyester blend, linen, and lyocell. If gym towels are used to wipe and absorb sweat after working out, then they will offer the best results as they are made up of highly absorbent cotton, bamboo, linen or microfiber material. Smaller than hand towels, the fingertips towels are more colourful and decorative in appearance and are again made of either cotton, bamboo, linen, or synthetic microfiber.

Finding other types of towels online to use them appropriately

A washcloth is the smallest of all the towels and can be used for drying the face or even the entire body if necessary. Because these tiny towels are made with either 100% cotton, a blend of cotton and polyester, or bamboo, they tend to be ideal for regular use or a quick fix when one can’t find the bath sheet. A foot towel for the feet can be an excellent choice to soak up all the water under and over the feet to keep the floor dry after a shower and maintain feet hygiene. Use a bath towel to wipe and absorb all the water on the body after a shower, including the hair.

Exploring face towels, spa towels, hair towels and kitchen towel

There are many varieties of towels to choose from online. A face towel can be especially useful in case of skin sensitivity or acne that requires special care and not spread skin tissues. Carrying a smaller spa towel can come in handy to wipe off any residue from the spa-like gel, cream or lotion and help wipe off the water after a sauna. A carefully chosen kitchen towel can lift the mood while cooking and help wipe food particles, water and oil away from the counter.

Buy towels online, keeping bath towel sizes in mind

When the size of the bath sheet is anything between 35X60 inches or 40X70 inches, full coverage and absolute absorbency can be completely assured. A regular bath towel will be able to dry and draped around the head to dry the hair, with a size ranging from 20X40 inches to 30X58 inches. Going for a hand towel to add to the collection can be a perk as these range between 15X25 inches or 18X30 inches to suit individual needs and come in handy in cleaning quickly or wiping things off easily. How often one washes and reuses a towel also helps in picking the right size.

Making purchases online, keeping colour schemes in mind

The colours of the collection of towels and their sizes also make a huge impact in presentability and visual appeal. When folded and placed together or individually, it can enhance the mood without realizing it. Towels take time to wash together and dry, and hence care should be taken to maximize their impact with colours and sizes. Go for matching colours or shades that compliment the entire decor of the bathroom, kitchen, dining room etc., depending upon where it is used and the towel type.

Using the same towel for various purposes and occasions may not be healthy. As a specific towel is designed to cater to a specific need and in order to avoid carrying dead skin, water, sweat and bodily fluids from one place or person to another, a different type of towel should be used. This would ensure the best hygiene. And what better a reason to opt for multiple, beautiful and aesthetic towels to complete the towel collection than this.

Why are SIPs a great starting point for your investment journey?

It’s a no-brainer that the demand for mutual funds has increased steadily. While a part of this growth is attributed to falling bank deposit rates, some credit also goes to the availability of high-yield investment options in the capital market.

Mutual funds are generally of four types – equity, debt, commodities, and index. And investors can invest in one or more mutual funds in two broad ways – lump sum and SIP. This article discusses SIPs in detail and explains why they have emerged as a favourite choice for first-time investors.

As a fact, AMFI data shows that the 51.7 million investor SIP accounts have contributed about INR 11,438 crore in February 2022 alone, taking the total contribution in FY21-22 to INR 1,12,238 crore.

Before delving further, let’s understand what a SIP scheme is and its mechanism.

What are SIPs in Mutual Funds?

A SIP or Systematic Investment Plan is the mutual fund industry’s answer to bank or post-office recurring deposits. While lump sum means investing an amount above INR 5,000 in one go, a SIP starts from INR 500 every month. The mechanism of SIP schemes is the same as recurring deposits. Just like you invest some amount in a recurring deposit, you need to invest a fixed amount every month in one or more SIP schemes.

However, mutual fund SIP schemes are more flexible than recurring deposits. For example, while recurring deposits are time-bound, SIP schemes are open-ended. So, you can stop investing for a temporary period or withdraw your funds at any time. Moreover, if you spot a lucrative investment opportunity in the SIP you have invested in, you can also top up your fund with a lump sum amount of INR 5,000 or more.

Why are SIPs a Preferred Investment Option for First-Time Investors?

Here are the top reasons why first-time investors prefer investing in SIP schemes:

Low Investment Amount

A SIP can be an excellent route to enter and understand before investing a lump sum if you have never invested in the capital market before. You can invest a lowly INR 500 every month and increase the amount after gaining confidence. SIP schemes also allow quarterly, half-yearly, and annual investments.

Flexibility

SIP schemes are always open-ended. This means that you can invest and withdraw as often as you want. However, mutual fund houses generally levy an exit fee on withdrawals made before a period, such as one year, two years, three years, etc., mentioned in the scheme document. Additionally, you must understand the taxation well before withdrawing the funds.

Save Taxes

Equity-Linked Savings Schemes or ELSS funds allow tax saving of up to INR 1.5 lakh every financial year under the Income Tax Act’s Section 80C. These funds have a lock-in period of three years and allow SIP investments. So, if you put an amount in March 2022, you cannot withdraw the amount before March 2025. However, the lock-in period provides higher authority to the fund managers to use your funds optimally.

Reduced Volatility

If the capital market’s volatility leaves you worried, investing in SIP schemes will be a prudent choice. Since you invest a fixed amount every month, your risks spread out evenly. For instance, when the markets are in the negative territory, you get more units with the same amount and vice versa. Hence, you can profit more when the market enters the positive territory.

One-Click Investment

Investing in SIP schemes is as easy as 123. You can quickly find the best scheme depending on your risk profile and click on ‘Invest’ to experience next-gen investing. So, leave your worries of visiting financial institutions behind and enter the world of convenient investing through SIPs.

The Best SIP Scheme is a Click Away!

Finding the best SIP scheme is a challenge since past performance rarely indicates future performance. PGIM mutual fund invests in top-class equity stocks and debt instruments to offer capital appreciation minus many risks. Check the scheme portfolios of the best performing PGIM mutual fund schemes before investing your hard-earned money.

Why Term Insurance Plan is Important at Every Stage of Your Life?

Milestones are significant events in your life.

The transition between several stages marks key life milestones, and as you progress from one to the next, your needs, aspirations, and expectations change.

You might be young, carefree, and not overburdened with responsibilities right now. But keep in mind that things will alter as time goes on.

A life insurance policy functions as a saviour for your family, protecting them from unforeseen circumstances. Most policies are term plans. It provides your family with financial security and protection from illnesses such as cancer, heart disease, and other ailments.

We go through numerous periods in life, each with its own set of objectives and plans. Some of these objectives may include your first job, marriage, child, retirement, and so on. As a result, it is prudent to plan ahead of time for your objectives to achieve. As well, a person’s financial obligations differ depending on their stage of life. Therefore, you must choose your policy carefully.

What are the advantages of term insurance?

Customers can profit from term insurance in a variety of ways. Some ways are listed below:-

Tax** Benefits – Premiums paid under Section 80C and premiums paid toward a critical illness benefit under Section 80D are eligible for tax benefits. Section 10 (10D) of the Income Tax Act, 1961 exempts the lump-sum amount received by nominees as the sum assured/death benefit from taxes.

Critical Illness Coverage – If you choose to add optional Critical Illness Coverage1 to your term insurance plan, you will receive a lump-sum payment if you are diagnosed with any of the plans’ covered critical illnesses1.

Whole Life Cover- Term insurance products provide significantly more coverage than whole life insurance plans. Whole life insurance policies cover you until you’re 99 years old.

Payment of the Sum Insured – If the individual insured passes away, the family members will receive the sum assured as a payout. The policyholder can receive a lump payment, a monthly or annual income, a mix of lump sum and income, or a rising income at the start of the policy. This will assist with financial necessities and household expenses, and other charges.

Terminal Illnesses Coverage – Term insurance plans can provide lump-sum payouts in the event of a terminal illness2 such as AIDS.

Accidental Death Benefit – The Accidental Death Benefit benefit3 can be added to your term insurance policy. This will protect against future mishaps.

What is the Importance of term insurance at different stages of life?

Here are the points that are listed below:-

● Getting started in your career

You may have few or no financial duties and liabilities when you are young and starting your profession. As a result, at this point, purchasing an insurance policy is the best option for you because you can acquire coverage at a reduced rate.

● Stage of Newlyweds

Marriage is one of life’s most significant events. You might be ecstatic to begin a new life with your cherished partner. This is an ideal time to get an online term plan. The insurance will assist you in obtaining adequate coverage for your spouse against rising liabilities, as these responsibilities will fall on your partner if something goes wrong with you.

● Being a Parent

The thrill of becoming a parent is indescribable; it is a wonderful experience. Isn’t it true that you want to offer your child the finest of everything as a parent? You want to grant your child’s every whim, from the best education to the best lifestyle. The policy’s claim amount will be useful in meeting your child’s necessities, such as education and other things, for a longer period.

A wide range of term insurance plans is available in the market, offering different benefits. It is advisable not to take a one-size-fits-all approach when considering the benefits.

The stages of life mentioned above are some of the occasions when you should reassess your insurance needs. To ensure the financial security of a family, a person needs to purchase a term insurance plan as it is vital to ensure their family’s financial security.

Therefore, it is important to ensure that your family is financially stable no matter if you’re married, a single parent, or a retired parent so that they can live a secure and stress-free life in the event of an unfortunate event.

Register Your Growing Freelance Business At The Best Freelance Marketplace

Freelancing or entrepreneurship are at their peak. Some experts have highlighted that the industry is yet to go higher.

Thanks to the Covid-19 pandemic, the freelance marketplace has emerged as the strongest section across the globe. Freelancers who were already in the market expanded their presence. Those who freshly entered the freelance marketplace made sure to remain under the limelight in order to secure a project.

Reasons To Register At A Freelance Marketplace

In other words, everyone has benefitted by registering on the best freelance marketplace. People who had lost their jobs are now reportedly earning an equivalent income in a short span of time.

Apart from money, there are many more reasons why one must register their growing – or newly started – freelance business at the best freelance marketplace. Here are some of the reasons:

1. Work From Anywhere

Once you have registered at the freelance marketplace, you are free to work from any place of your choice. You dictate where you want to work, provided you are able to deliver the project on time.

You can also change your work location as frequently as you want.

2. Get Paid For Efforts

In complete contrast to the companies’ professional environment, you do not have to work extra hours as a freelancer. You get paid for the amount of effort that you invest in a project.

As a matter of fact, you can charge your client for extra hours that you might have to invest in their project.

3. Choose Your Client

As a freelancer, you get the liberty to choose the client at a freelance marketplace. You can even change your client portfolio depending on the direction of your freelance business or your interest.

Freelancers are even known to fire their clients after coming across some unprofessionalism in their behaviour.

4. No Politics

While employees have to balance their projects and appreciation to their superiors, the same does not apply at a freelance marketplace as it is only your work that speaks. In the case of a newbie, it is always his or her profile that works in their favour.

Since a freelance marketplace allows you to interact with the client directly, you can openly talk about work and its productivity.

5. Choose Your Pay

Yes, that is right! You can choose how much you must be paid in a freelance marketplace. It may be subjected to a client’s budget, but you would still be at your will to reject a project if it pays low.

Those who spend a lot of time working at a freelance marketplace report an increment at a faster rate than employees.

6. Unlimited Learning

A freelance marketplace has numerous challenges. You connect with different people almost every day, and they all have varied demands. Understanding their demands and delivering the project is a huge challenge in itself.

Learning, therefore, simply does not stop once you register at a freelance marketplace.

7. Do What You Love

It does not matter which field you choose at the beginning. You can always switch later. You can even keep exploring your current field of interest.

You are literally allowed to do what you love at a freelance marketplace.

8. Job Security

Security here mostly refers to the fact that someone can never fire you unless you are bad at what you do.

Freelancers remain in control over their employment status and income generation.

9. Choose Your Projects

No one at the freelance marketplace pressurizes you to do something other than what you have chosen and agreed to do. You continue to get options to explore your field.

Freelancers are also presented with a list of work that they can choose to pick.

10. Be The Leader

Freelance marketplace allows you to be the leader. You can make a decision yourself and take your freelancing business in any direction you want. No one influences you to do something other than what you really want to do.

You can be a single-person company at a freelance marketplace.

Freelancing has a long way to go. There are uncertainties at the freelance marketplace as well, but you remain under control all the time.

Understanding the process of allowance transfer for the students of a university

Most universities around the world offer allowances, scholarships and grants to their students. There is a procedure for allowance transfer to the bank accounts of students. There are specialised banks that facilitate university allowance transfers for students. The basic process of allowance transfer begins with opening an account with a fully digital bank such as Weyay Bank for students studying in Kuwait. Account opening is fully online and is very fast, and all the students need are a Civil ID, a registered mobile number and a valid home address. Once the account is opened on the bank app in the applicant’s mobile phone, the student is ready to begin to receive allowance transfers in his or her account.

The next important step is applying for the student allowance itself. The Ministry for Higher Education (MOHE) in Kuwait pays different types of scholarships and allowances to help students pay for their education. This facility is available to Kuwaiti students and foreign students studying in Kuwait and to students of Kuwaiti nationality doing specialised studies in other countries recognised by Kuwait.

There are also universities in several countries that provide allowances to both local and international students. These students are also required to apply to their respective universities for reasons of merit and inability to meet expenses. In many cases, there is allowance transfer to the accounts of parents, but in most cases, the allowance is paid into the bank account of the student with the assistance of the concerned University.

The actual process

Students looking for an allowance are required to apply to the universities for grants, allowances or scholarships. In the cases of Kuwait, students need to apply to the Ministry of Higher education (MOHE) for a civil ID as allowance transfer will not be possible without a bank account in the same country, and a civil ID is also required for opening an account.

One of the highlights of Weyay bank is the handling and management of allowance transfers from the Ministry of higher education (MOHE) directly to the account of the student. Account opening is very easy, and all the activities and banking features of Weyay bank are wholly digital. The student needs to have a civil ID, a registered mobile number and proof of residence.

After opening a bank account, the next stage is to apply to the Ministry of Higher Education (MOHE) for a student allowance. The application needs to have all the university’s details, the course, and the expenses for studies. The concerned University endorses these details, and MOHE will scrutinise the application upon receipt. The application must mention the Weyay bank account number to transfer the allowance to the account.

There is constant monitoring by both the University as well as the Ministry for higher studies. The academic performance of the student and the conduct are carefully monitored, and the allowance can be stopped in case of adverse reports reaching the MOHE.

Weyay bank, in turn, monitors the spending habits of their young clientele and offer them incentives and rewards for spending wisely and for inculcating habits of saving and investing. There are also rewards for good banking practices, and there is more to allowance transfer than just receiving and depositing student allowances.

More and more universities are adopting this practice of allowance transfer in different countries, and the procedures vary from country to country though the basis Weyay bank model has shown the way.

Things to Consider When Buying Dining Chairs in Dubai

The constant use and fabric components (if upholstered) of dining chairs in Dubai often cause them to show wear and tear and become damaged faster than the dining table.

As a result, you have the option of purchasing fresh seats to complement your dining table rather than purchasing a set.

You can save money by purchasing just dining chairs rather than the entire set.

Life happens in the dining room furniture in a variety of ways, from slow breakfasts to huge dinner parties to game nights. Here’s how to choose dining chairs for your ideal meeting spot:

However, purchasing dining chairs in Dubai might be difficult. You’ll want to think about a few things to make sure you pick ones that match your current table and dinette decor.

You must also make certain that the dining chairs in Dubai you purchase are appropriate for your needs, preferences, and budget.

Let’s start with the Look and Feel

Consider the appearance and feel you want to achieve in the room before going to the store to try on dining chairs. Buying chairs that don’t match your dining table is a regular error we see people make.

We advise against purchasing your table and chairs as a set because it introduces too much of a single material into the room. In dining room furniture with a timber table and chairs, you’re stuck deciding whether to put in a sideboard or buffet.

Measure the height of your Table

Since you already have an idea of the kind of dining chair you prefer, now you must determine the table’s height. Because not all tablets are created equal, you should go into a store with your table height in mind.

This will help you verify that the chairs sit properly under the table and that your legs have adequate space under the tabletop when you sit in the dining chair. Don’t be afraid to bring a tape with you to the store, sit on a dining chair, and measure the height of the top of your table.

Know Your Style

You’ll need to decide on a décor style if your space doesn’t currently have one. Slim, thin chairs are appropriate for a sparse, minimalist style, while deep woods and intricate workmanship are appropriate for a homey, traditional style.

If you match either option with anything too contrasting, it will seem weird.

You’ll also want to pick a covering that suits your style criteria while still being useful. A light-coloured or easily stained cloth will not function well in a family with children.

Take a Seat

It’s easy to be swayed by a chair’s appearance alone. You must sit in it for at least a few seconds. Without the addition of pillows or cushions, it must feel comfortable to you. Imagine sitting on it for an extended lunch or chat. If you don’t, this isn’t the chair for you. Make sure your search doesn’t end there if you started it online. Use an online store or catalogue to limit your options and get a sense of how much you’ll have to pay. Then, go and try out your potential dining chairs once you’ve done that.

Living in Dubai? Here are the best credit card offers for you

Dubai is a shopper’s paradise and a great place to live. Dubai is also emerging as a major business hub around the world and is known for its places to visit, that include ultra-luxury hotels, amusement parks and unbelievable shopping malls. Almost Everything in Dubai is classy, glitzy and economical. The shopping festivals of Dubai are famous for great products available at unbelievable prices. One of the must-have things that a person living in Dubai needs is a good credit card.

There are plenty of credit cards available in Dubai, and choosing the best needs going into details and reading the fine print for special features that many cardholders are not even aware of.

Comparing which is the best

Here is a list of the features to choose from while selecting the best credit card offers in the UAE. A good way to make a comparison is to go to the website of each individual credit card provider and make a comparative table of the features listed below:

Zero membership and annual fees- There are several credit card offers in UAE that charge no membership fees and do not even charge annual fees. This feature marked with yes or no is to be marked in the table.
Every feature and benefit available in a credit card must be listed. There are several features that are offered, and these include cashbacks, discounts and rebates. Cardholders will observe that there are specific credit cards that offer special rebates for specific stores and products. Credit card companies offer special rebates in the form of air miles obtained from credit card sale of airline tickets and provide free lounge access in airports. There are specific card cards that provide extra offers on sales of retail products. All these features need to be mentioned in the comparative table.
Digital security- Credit cardholders need security as well as convenience of use. Hence the credit cards with the most online features stand out. Many credit cards use security features such as an online virtual card where the cardholder can generate a new card number for every transaction or multiple transactions with the same company or store. Such frequent change of card numbers can be difficult to track or hack and are considered very safe. Credit cards can also be linked with digital wallets, and the features can be tabulated.
Credit extension- Credit cards provide a limited amount of credit, and the balance is required to be paid back within stipulated period to avoid heavy interest charges. Cardholders are always on the lookout for credit card offers in UAE that offer a longer payback period than the standard 30 days. All the better if this facility is combined with a zero-interest balance transfer facility. This means that the cardholder can transfer the credit balance of a credit card into a new credit card without repayment and avail of the credit term in this new card as well. Cardholders must make a note of these points and go for the credit card in Dubai that offers these benefits along with a host of other benefits.
Making a note of all the terms and conditions- There are times when a credit card offers several attractive features but has hidden clauses that can hit a cardholder by surprise. One of the finest examples of a hidden clause is a penalty that is added to the bill for a credit card not being used for a period of time that can range from a month to 2 months. People must also note the actual interest that may appear to be affordable in single digits but is the interest rate for a month only, and the effective interest rate per annum may be very high.
Provisions for emergencies- Many credit card offers in UAE come with provisionsfor emergencies that are often not foreseen. These include validity at all international locations where the credit card can be used. Another emergency service is roadside assistance and pickup services in the unfortunate event of an accident or a car breakdown on a deserted highway. Credit card companies also offer extended credit to cardholders and allow them to defer repayment until their emergency is under control. Many credit card offers in UAE have a feature that is known as an energy shield. This essentially means that a cardholder can allow a certain amount of money to be added to the bill every month or two months, and this collected amount is paid to the cardholder in an emergency that includes death or a serious medical emergency or even a job loss. These emergency provisions make such credit cards priceless, and these are positive features to watch for during the hunt for the best credit card offers in UAE.
Benefits and rewards are the most important feature in a credit card, and looking for all the benefits is like a virtual treasure hunt. The best credit cards offer heavy discounts on using the card during the first 60 days after a new issue. This is the time and the opportunity to go in for a big purchase such as a new TV set or a new smart mobile. In addition to the regular discounts, special rates will be applicable for use within the first 60 days. Some of the best credit cards offer rebates of upto 20% for dining in select restaurants, and new card purchasers need to research and pick up the one offering discounts on their favourite restaurants so that there are savings on each dine out.

New credit card applicants looking for the best credit card offers in UAE need to compare all the features as listed above and choose the one benefiting them the most and all-round profitability in using the credit card. However, credit cards need to be used smartly to derive all the benefits and make it worthwhile to own a credit card.

How do BNPL business models work?

With BNPLs, customers can buy any product or take a small loan and pay for it later, predefined at the start while borrowing the funds. However, buy Now Pay Later service has been in the industry for more than 15 years. It started to pick traction in 2019 with more than a 30% increase in its customer base.

Many Gen Z and Baby Boomers prefer to Buy Now Pay Later services to shop online and for other needs. The main reason for doing so is that BNPL services do not require you to have a good credit score.

It has been seen that BNPL services reached a transaction volume of $120 billion in 2021, while it was just $33 billion in 2019. This is mainly because Gen Z and Baby Boomers are adopting this service on a large scale. Currently, there are more than 100 BNPL firms around the world that offer their service to a large set audience. These numbers are also increasing at an alarming rate, making this a huge success.

How to Buy Now Pay Later business model work?

Buy Now Pay Later is used by both customers and the business, and the vendors make money from both the involved parties. How the Buy Now Pay Later business model works is that the BNPL vendor takes charges a fee of 2% to 8% from the business on the amount that a customer pays at the store. This is the primary way for the BNPL vendor to make money.

For customers, the BNPL vendors charge an interest fee of 10% to 30% if they are not able to repay the loan amount in a given time period. If the customer pays the loan amount during the defined period, no interest will be paid.

However, studies show that many people do impulse buying and are not able to pay the loan amount at a time, thereby paying an interest charge as well.

BNPL vendors are making a stronghold for themselves in the market by giving out many offers to both parties and are getting more and more customers to their service.

Integration with business – Many of the businesses have stated that they see an increase in the order value by a customer by 20% to 30% since post covid, and most of this is from Buy Now Pay Later service. This has made businesses accept the 2% to 8% charge that the BNPL service charges the customers.

To date, Buy Now Pay Later services are quite profitable and are expected to be so in the long run as well.

The Buy Now Pay Later business model proved to be a great hit among young people as many of them have just started their careers and can’t afford the huge interest rate offered by credit cards. With the BNPL business model and good purchasing power, the young generation is also learning to manage their finances and save by shopping at the right time.

Cons of Buy Now Pay Later Business Model

The main idea for this business model to work is that customers should keep shopping so that the BNPL vendors can make money from businesses. However, studies have also shown that once a customer cannot pay their repayment amount on time and when heavy interest is charged, the customer gets disappointed, which later translates into not using this service. If customers don’t use this service, then the Buy Now Pay Later vendors cannot make a 2% to 8% margin from each transaction from businesses that are their primary income source.

Many financial analysts have suggested that Buy Now Pay Later services should come up with such a way that they can survive even low transaction rates without fully depending upon the customers buying options.

Studies show that Buy Now Pay Later service is quite a hit and is said to overtake the credit card industry in the long run. With less or zero interest rate, the service has attracted a lot of young generation who are currently leading the shopping industry with very high purchasing power.

Customers need to understand that availing BNPL service is still like a loan, and if they cannot pay it back on time, a high-interest fee will also be put on the principal loan amount. The future of Buy Now Pay Later service looks quite strong; however, this entirely depends on whether the customers can pay their amount on time.

Do eCommerce sites have BNPL options? How does it work?

The exponential rise of the buy now pay later system has been evident in almost every domain, owing to its incredible convenience and value-addition to consumers and businesses alike. If you are new to this arena, then BNPL is a financial payment mechanism whereby the user pays only a fraction of the total purchase value, the rest of which is paid by the BNPL lender. Over the course of an agreed period, the user then repays the lender through interest-free EMIs, for which a charge is applied only in case of a default. Today, such a system has revolutionized the fintech domain.

How BNPL fits into eCommerce

ECommerce

is one of the major areas in which the buy now pay later paradigm has emerged victorious. Online stores have also found it extremely convenient to instill the BNPL feature into their payment system as a primarily digital service. With a growing user interest in this system, eCommerce retailers have also realized the value being added to their stores. Since the birth of BNPL apps, there has been a growing acceptance from digital stores and is soon expected to be present in almost every eCommerce shopping experience.

Why are online stores making the shift?

As mentioned before, buy now pay later apps are being highly sought after by online retailers and digital store owners. Here is some insight into the major reasons contributing to this shift:

Better user experience – Adding the BNPL feature to your online store automatically improves the user experience by a huge margin. Most apps have an incredibly user-friendly interface, meaning users can seamlessly go through the payment system and make high ticket purchases.
Competitive services – With the shop now pay later feature, online stores can improve their overall shopping experience, thereby improving their competitive game plan against other stores in the market that may not possess this feature yet.
Increased retention – eCommerce stores that make use of the BNPL system often have a higher consumer retention rate, and users feel comfortable coming back to shop at a store that offers them the right payment mechanism. Moreover, the presence of such a feature also helps stores bring in new customers who are loyal to the BNPL payment system.
Convenience – As the BNPL system does not require users to pay immediately, it makes products more affordable and adds convenience to every shopping experience. Being a digital feature, users can simply push a few buttons on a screen to buy products of their choice without having to shell out a dime. This improves the consumer’s shopping experience and even incentivizes them to purchase higher value.

Unraveling the mechanism

While understanding the benefits that the buy now pay later system brings to eCommerce chains may be a seamless affair, comprehending the process behind adding it to your store and the paradigm that it follows may be slightly daunting. Here is a simplified version of how exactly the mechanism functions:

Like any other payment plugin, online stores add the buy now pay later feature to their payment page. Depending on the BNPL app (through careful consideration of the fees, profitability, interface, etc.) that the store has chosen, the coding might differ a little. However, such apps provide ample assistance during this process.
Once integrated into the website, consumers can find it as a payment option alongside others like credit cards, debit cards, net banking, etc.
Users will be required to click on the BNPL option, after which they will be directed to a separate page, wherein their profile will be established and verified through a few simple steps.
Following a marginal down payment, the customer will be able to complete the transaction, and the BNPL lender will make the rest of the payment.
Depending on the repayment scheme, the user will either make a lump sum payment at the end of an agreed-upon period or will pay small installments in a recurring period.
The eCommerce platform receives a discounted amount since the different forms the source of revenue for BNPL apps. This discount is provided for such services as remuneration for prospectively bringing in more customers and increasing the ticket purchase value.

Most eCommerce platforms today provide users with the BNPL option, as there is a growing awakening towards its numerous benefits. Stores simply need to follow the simple steps involved in adding it as a plugin, while users will be able to find it as a separate option on the payment gateway. The buy now pay later service market seems to be rapidly growing as well, as more and more apps enter the field and offer better services to both users and sellers.