BNPL, or buy now and pay later, is a buzzword these days. Consider this: India’s existing BNPL market is worth $ 300-3.5 billion (about Rs 22,500-Rs 26,250) and by 2026 $ 45-50 billion (about 3.37-3.75), according to consultants. It is expected to grow to rupees). A solid Red Seer.
The industry is expected to grow against the backdrop of millennials and self-employed people who generally do not have access to formal credit history. Given the huge untapped market, BNPL players are this huge, especially if India’s credit card population is limited to 67 million, while banks focus only on the top 100 million. I am paying attention to the opportunity.
There are two types of digital BNPL players on the market: payment finance and transaction finance. For BNPL players such as LazyPay and Simpl, you don’t have to go through the long process of adding credit cards or money to your wallet or waiting for a one-time password (OTP). You can combine all invoices and pay only one invoice after 15 days. Transaction finance, on the other hand, allows you to make high-value purchases with a small EMI.
“As an evolving payment trend in India, buying now and paying later is offered primarily in two avatars to serve two different purposes: convenience and affordability. Consumers will enjoy the experience and avoid the hassle of prepaid per transaction. This is an interest-free payment option if paid within a 15-day repayment cycle followed by Lazypay, while affordable. Priced BNPL is an expensive solution. LazyPay’s business head, Anup Agrawal, said:
Also read: Things to consider before taking out a loan under the BNPL scheme
The next question that arises is what happens if you fail to pay and fail to pay on time. Now, there is currently no standard practice that BNPL players follow, so the billing structure varies from company to company. It is important to be aware of hidden costs, lack of disclosure and transparency, and some risks arising from a new credit population with no credit history.
Here’s a list of common rates you need to know before choosing a BNPL feature.
Processing cost: Digital BNPL players typically charge loans in the range of 0-99 rupees.
Postpaid charges: The borrower must pay the arrears until the membership fee is settled. For example, Flipkart’s Pay Later charges late fees in the range of 60 to 600 rupees for charges of 100 to 5,000 rupees and above. Similarly, with LazyPay, users will be charged a daily penalty of Rs 15 rupees.
Interest level: It’s important to understand that different companies have different billing structures if payments are delayed. Some charge late payment fees, while others charge interest in the range of 2-3 percent per month. For example, a payment company like Paytm charges a customer 3% interest on the unpaid amount to extend the due date by one month.
Other costs: If you plan to terminate your loan before the scheduled period, the BNPL player may also charge a prepaid fee. For example, HDFC Bank’s pre-closure of FlexiPay services will incur a 4% fee for 18% of unpaid principal and GST.
Also read: Are we heading for a BNPL trap?
What if I miss a BNPL payment?
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