Buy Now Pay Later, this option of purchasing has grown in popularity over the years, particularly among the younger generation. BNPL solutions emerged roughly in the early 2010s to address the issues surrounding financing, which in essence is to reduce the complexity of credit cards and the high fees associated therein. The exorbitant fees of credit cards have led consumers to look elsewhere for alternative payment methods, which has led to the increasing popularity of BNPL.
As an alternative to credit cards and other forms of financing, BNPL solutions were designed to allow shoppers the ability to purchase their products and pay either in a predetermined number of installments over time, or with lease-to-own options.
Buy Now Pay Later (BNPL) what is it and how did it develop:
Due to the rise in the economy’s digitalization process, particularly since the COVID-19 pandemic, people have shifted to making use of digital payments to avoid physical contact and the transmission of the potential virus.
Buy Now Pay Later (BNPL) is a form of short-term financing that enables consumers to make purchases and pay for them over time, this is also commonly referred to as a Point of Sale (POS) installment loan that doesn’t charge interest. Therefore using BNPL financing is a convenient alternative which is an easy alternative for consumers to get approval for as well and BNPL won’t affect your credit score unless you fail to make payment.
Advantages of Buy Now Pay Later:
Buy Now Pay Later (BNPL) Each program has its different terms and conditions, however, they offer short-term loans, with fixed payments, no interest, and no additional charges. Therefore this gives the consumer the benefit of knowing their payment amounts up front and each payment will remain the same. Payments can be deducted from your debit card, bank account, or credit card and you have the option to make payment via check or bank transfer.
Credit cards often charge interest on any amount that is carried over to the next billing cycle, therefore the BNPL does not charge you interest. This is a helpful option for people making purchases in difficult economic times when inflation is high and interest rates rise. Although Buy Now Pay Later (BNPL) can assist you in making purchases that you ordinarily wouldn’t have otherwise been able to make at that time, however, if you are not careful you could place yourself in a situation where you have more debt than you can afford at the time.
The Appeal for Gadget Enthusiasts:
BNPL has opened up a new realm for gadget enthusiasts, therefore there is no need to wait and save up for the latest PlayStation or SmartPhone or a cutting-edge gadget, this allows consumers to acquire the gadget instantly and pay for it over a certain period of time. Therefore allowing for increased flexibility. New technology is introduced and developed often daily or monthly, therefore allowing consumers to engage and obtain the new gadgets with ease, instead of needing to get the gadget with their credit card. Therefore Buy Now Pay Later (BNPL) allows consumers to remain up to date with the latest gadgets without causing a strain on their budget.
A few of the Benefits Listed:
- The BNPL is a simpler and more transparent process and option for consumers. These transactions are often more simple, and the terms are agreed to at the checkout process.
- Interest-Free Options: many BNPL providers offer interest-free installment plans, therefore making this option a more cost-effective alternative to traditional forms of funding.
- Immediate access to tech upgrades: this enables consumers to acquire gadgets immediately without needing to pay the full price of the object upfront, this is a form of instant gratification and appeals to those individuals who value staying up-to-date with current technological trends.
- Budget-Friendly Payments: Having the ability to pay for the gadget over some time, at no extra cost, allows for the more expensive gadgets more manageable for consumers as they can budget for it from inception.
Consumers are often reluctant to spend a large chunk of money at one time, therefore having the ability to utilize BNPL, it isn’t as big of a shock to the consumer for a large amount of money to leave their bank account. Buy Now Pay Later (BNPL) is therefore a win for consumers as it provides more flexibility and more control of what and how they purchase their items.
