Buy Now Pay Later (BNPL) Apps

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.

Pay Later Apps

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:

  • Purchase what you wish at the participating retailer.
  • Under the payment modes, opt for the ‘Buy now, pay later’ option.
  • Now make a small down payment of the purchase amount.
  • The rest of the amount will be deducted through interest-free EMIs via your bank account, bank transfer, cheques, credit card, or debit card.

Pay Later Apps v/s Credit Cards

Following are the main differences between credit cards and Pay Later apps in India.

Pay Later AppsCredit 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.

BNPL Key Features

Following are some of the key features of BNPL apps:

  • These apps are highly affordable, making them a cost-effective alternative to funding. 
  • Unlike credit cards and personal loans, for many Buy Now Pay Later apps no credit check is required.
  • BNPL provides instant access to credit.
  • These apps are safe and involve a secure transaction process.
  • You can pay back the borrowed amount in flexible repayment tenure.
  • They offer no-cost EMI options.
  • The entire funding process is simple and transparent.

Pay Later Apps in India

Following is the list of 5 best pay later apps in India in India with their key features:

Amazon Pay Later

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.

  • Avail of Amazon Pay Later payment option during checkout on Amazon.in and pay later.
  • Repayment can be made next month of the purchase or in EMIs over 3, 6, 9 or 12 months. 
  • Track your purchases, repayments, and limits history with a simplified dashboard.
  • No processing fee, cancellation fee or pre-closure charges.
  • The maximum purchase/transaction limit is Rs. 60,000.

LazyPay

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.

  • Pay through any app or scan and pay at your favourite store.
  • You can also use LazyPay UPI ID to make payments online.
  • Make repayment in full amount after 15 days or through flexible EMI plans of 3, 6, 9, 1 EMIs.
  • It is partnered with 250+ merchants.
  • You must be aged between 22 and 55 years old to be eligible to avail of this facility.

Paytm Postpaid

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.

  • The maximum borrowing limit is Rs. 60,000.
  • You can complete the onboarding process by just submitting your PAN card number, email ID, and a few other basic details, which take 2 minutes.
  • You can repay the Paytm Postpaid credit amount in up to 6 easy monthly instalments.
  • The credit amount must be repaid on or before the 7th of every month.
  • Users can get an interest-free credit for up to 30 days.

ZestMoney

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.

  • Making payments at 100,000 offline and 15,000 online stores using Zest.
  • ZestMoney offers a personalised credit limit of up to Rs. 2 Lakhs.
  • No interest, joining fee and hidden charges involved. 
  • It offers an easy and fast 3-step approval process.
  • Repay the borrowed amount in 3 to 4 months. 

Postpe

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.

  • Postpe offers a credit line between Rs. 1,000 to Rs. 10,00,000 without any collateral at interest rates ranging from 15% to 20% per annum
  • repay your credit in full within five 5 days of bill generation (i.e. 1st of every month) or convert it into 3 to 6 low-interest EMIs.
  • Invite your friends and get up to 5% cashback.
  • No annual fee and hidden charges are involved.
  • Pay your bill using any UPI app, debit card, or net banking.

Documents Required for BNPL Apps

Following documents are required for BNPL apps:

  • ID Proof: Passport, Driver’s Licence, Voter ID, PAN, Aadhaar Card, or NREGA Card. 
  • Address Proof: Telephone Bill, Gas Bill, Phone Bill, Ration Card, or Electricity Bill. 
  • Bank details like bank account number, IFSC code, etc.
  • A selfie as per the service provider’s guidelines.

BNPL Eligibility Criteria

You have to meet the following eligibility criteria to be eligible for the buy now pay later facility:

  • You should be an Indian resident.
  • You should be aged at least 18 years old. 
  • You must have all the required documents.
  • You should live in Tier 1 or Tier 2 cities in India (in some cases).
  • You should be a salaried individual.
  • You must have a bank account and KYC details.

Where can you use the BNPL option?

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.

Buy Now Pay Later FAQs

How does BNPL work?

Here's how BNPL works:

  • Make a purchase online or offline at any participating retailer.
  • Opt for the ‘Buy now, pay later’ option during payment.
  • Make a small down payment of the entire purchase amount.
  • Repay the remaining amount in a series of interest-free EMIs via bank transfer, debit card, cheques, credit card, or directly from your bank account.

Do we need to pay a monthly EMI like a credit card if we use pay later apps?

You can either pay the entire amount after 15 days or repay via EMIs using the BNPL facility.

What is the time to repay the amount if we buy via pay later apps?

Most pay later apps provide a tenure of 3 to 12 months to repay the amount.

Which banks are offering BNPL service?

Many banks, such as ICICI Bank, Axis Bank, Kotak Mahindra, HDFC Bank, etc. are offering the BNPL facility to their customers.

Is it mandatory to have a good credit history to use BNPL?

No. Most BNPL apps do not require a good credit history.

What if I am unable to repay the buy now pay later within the set timeline, does it affect my credit score?

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. 

How many times can I use the “buy now pay later” option from the same lender?

There is no such limit prescribed by the lenders.

Which is better - Buy Now Pay Later Vs credit card?

BNPL and credit cards both have their own benefits and flaws. Read the following key differences before opting for any of the methods:

  • Universal acceptance: Credit cards have better universal acceptance than BNPL apps.
  • Access: BNPL offers instant and easier access to credit than a credit card
  • Interest: For BNPL schemes, the interest is charged only when the user opts for longer repayment tenure, much beyond the interest-free credit period. Credit cards charge interest on the due amount if not paid timely.
  • Charges: While some credit cards are free, many involve charges like joining fees, and renewal/annual fees, which can higher for the more premium cards. BNPL options may or may not come with any such fees. Usually, bank-based BNPL apps do not charge a processing or joining fee.
  • Interest-free period: While credit cards typically have an interest-free credit period of up to 45 days, BNPL usually offers an interest-free credit period of up to 15 days in most cases. However, some BNPL lenders now offer an interest-free period of up to 45 days. In fact, some BNPL providers ever offer a longer interest-free period. For instance, Uni provides an interest-free credit period of 3 months to its consumers using its Paylater card.
  • Eligibility: Not everyone credit card applicant gets approval as card companies and banks decline many applications that do not meet their strict eligibility criteria. However, most of these consumers can easily get the BNPL option easily.
  • Credit limit: For most BNPL apps, the overall shopping usage is restricted to an aggregate of Rs. 60,000 a year. If your requirement is bigger, you may either opt for full KYC or go for a credit card with a higher limit.