How is the BNPL Model Changing Consumer Shopping Behaviour Online?

Young adults are increasingly reaping the benefits of the BNPL deal. It is one of the fastest-growing payment methods for e-commerce which is likely to increase from 3% in 2020 to 9% of the market in 2024. India's 'buy now pay later' business is expected to grow by 89.5% annually to reach $6927.4 million in 2022 alone. It will also record a CAGR of 54.3% during the 2022-2028 period. This was primarily driven by the rise in online shopping and digital transactions amid the corona pandemic.  

There has been an upswing in demand for BNPL since payments are spread in instalments. It is one of its kind and is ideal for big impromptu purchases. You can get your hands on food, groceries, kitchen needs and personal care and clear the bill via BNPL. Your favourite products are delivered to your doorstep without hassle. Pay later with affordable and interest-free EMIs within the next 90 or 180 days.  

Changing Consumer Shopping Habits

Delayed payments make it easy to shop without spending from your pocket right away. BNPL offers access to credit between ₹1,000 to ₹60,000. As a result, consumers are now less likely to make the whole digital payment in one go. Instead, they can simply download the BNPL apps from Google Play Store or App Store in India. Now one can apply for the desired loan amount, which is usually credited in the form of vouchers or an online wallet.  

Use the whole or part amount from the cash reserve as per your needs. Make purchases instantly and pay the EMIs via NEFT/IMPS or auto-debit facility at a date as per your convenience. No need to wait for your monthly salary or tap onto your savings. This empowers the customer and helps extract the best of deals, offers and discounts. 

The culture of scheduled payments helps inculcate financial discipline. Repaying your debt on time is responsible for boosting your credit score. This makes it easy to apply for other loans like a car loan or a home loan from fintech and traditional institutions. No wonder consumers are shifting towards pay later mode from plastic money. It is especially a viable alternative to debit cards, where the money is deducted from your account directly. However, this might not be feasible if you live on a budget or save for other life goals.  

Why BNPL?

Consumers are inclined towards BNPL since it is a more flexible, convenient and straightforward payment process regardless of your financial history. You can pick a repayment term that makes sense as per your current financial status. Furthermore, there is a 5-day grace period, which lets you arrange for the fund beyond your due date without penalties. This makes BNPL quite a popular product, especially among millennials and Gen Z.  

Conclusion

A pay later deal assures a breather to cash flow and is an excellent substitute for conventional payment methods. Moreover, you can apply for more than one BNPL on different shopping sites. This product is expected to see exponential growth in the coming years, with customers preferring this speedy solution over UPI, cash and cards.