Buy Now Pay Later (BNPL) apps are a type of short-term financing apps through which you can avail of quick loans for any short-term requirement and pay later in instalments in stipulated tenure. There are some online merchants and fintech companies in India that offer BNPL facilities to their customers to make the payment process convenient and an excellent alternative to credit cards. These Buy Now Pay Later apps are easily accessible and transparent.
Buy Now Pay Later apps are a payment option wherein you can purchase something through the app without paying from your own pocket. You sign up on the app that provides this facility, the company will make the payment for your purchase. Once the lender pays for your purchase on your behalf, you can repay the amount (purchase amount) within a stipulated tenure. You can either pay the borrowed money as a lump sum amount or via no-cost EMIs (Equated Monthly Instalments). If you fail to repay the amount within the stipulated tenure, the lender is authorised to charge interest on your amount. Any further delay could have a severe impact on your credit score.
All BNPL service providers have the same way of operating. Here is how these pay later apps usually work:
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Following are the main differences between Credit Cards and Pay Later apps in India.
|Pay Later Apps||Credit Cards|
|Pay Later apps have a transparent & cost effective pricing model.||Credit cards usually involve hidden charges.|
|Having a good credit score and credit history are not mandatory requirements.||The applicant must have a good credit score and strong credit history to get a credit card.|
|BNPL facility is provided by select fintech companies and e-retailers.||Credit cards are offered by almost every bank and NBFC in India.|
|BNPL apps usually provide an interest-free credit period of up to 48 months.||Credit cards provide a standard interest-free period.|
|BNPL approval process is easier.||Getting approval for credit cards is slightly difficult.|
|You have to repay the borrowed/transacted amount in fixed EMIs on the scheduled date.||You get the option of paying the minimum due amount only if you can’t pay the entire due amount.|
|No benefits are provided by BNPL apps like credit cards.||Credit cards provide cashback, discounts, reward points, airmiles and other benefits on purchases.|
Following are some of the key features of BNPL apps:
Following is the list of 5 best pay later apps in India in India with their key features:
Amazon Pay Later is offered by Amazon Pay (India) Private Limited ("Amazon") in partnership with Capital Float or IDFC FIRST Bank. Amazon Pay Later offers instant credit with the one-time setup process, which take just 2 minutes and does not require you to provide credit card details.
The LazyPay is one of the best shop now pay later apps. With this app, you can shop now on your favourite app and pay either the full amount after 15 days or through flexible EMI plans of 3, 6, 9, 12 EMIs.
Paytm Postpaid is offered by Paytm in partnership with Clix Finance and Aditya Birla Finance Limited. Paytm Postpaid gives you instant credit up to Rs. 60,000 at the comfort of your home. You can make purchases, pay bills, do recharges, book tickets, and so on using the borrowed amount.
ZestMoney is one of the best pay later apps through which you can buy in one go and pay in 3 or 4 bite-sized amounts with 0% interest.
Postpe lets you shop now and pay later next month, for anything from golgappas to mobile phones. It provides an interest-free credit for up to 30 days. You can convert your bill into low-interest EMIs.
Following documents are required for BNPL apps:
You have to meet the following eligibility criteria to be eligible for the buy now pay later facility:
You can use the BNPL option both online and offline. If you are making any purchase online, you can use the BNPL facility for making instant payments. In the case of Point of Sale (POS) transactions, you can use this facility for making the payment by scanning the QR code. You are not required to enter any pin or OTP for payment. The only thing you must keep in mind is that the merchant should have the BNPL facility as their payment option.
Here's how BNPL works:
You can either pay the entire amount after 15 days or repay via EMIs using the BNPL facility.
Most pay later apps provide a tenure of 3 to 12 months to repay the amount.
Many banks, such as ICICI Bank, Axis Bank, Kotak Mahindra, HDFC Bank, etc. are offering the BNPL facility to their customers.
No. Most BNPL apps do not require a good credit history.
If you are unable to repay the BNPL amount, you will incur a significant amount of debt, as the service provider will continue to charge interest on the remaining amount. Any further delay in the repayment will also lower your credit score, making it difficult for you to avail of any loans or credit cards in future.
There is no such limit prescribed by the lenders.
BNPL and credit cards both have their own benefits and flaws. Read the following key differences before opting for any of the methods: