BNPL is a new concept in the credit options available in the industry. It allows borrowers to pay back their debt at their own pace. BNPL also provides flexibility through its flexible repayment option, where you can choose between paying off your loan by prepaying or making regular repayments every month without worrying about interest rates or other fees related to payment processing charges.
The buy now pay later payment option is a hit among millennials. They prefer to pay later rather than early, meaning they need a product that can be used over time. This is why many lenders now offer millennials loans with flexible repayment terms.
BNPL at a glance
BNPL is a short-term credit solution that has become one of the most in-demand financing options. The BNPL industry is now more than $100 billion. It is set to increase further over the next few years as it becomes more accessible for people with cash flow problems to borrow money from banks, microfinance institutions (MFIs), and other financial institutions.
The payment method has also wooed merchants worldwide, allowing eCommerce companies to offer installment products to consumers who do not have enough money available when they purchase or buy something from an online store or physical store.
How commonly is BNPL used in eCommerce markets globally?
The BNPL network has been used in many countries, including the US, the UK, and Canada. It is also used in many sectors, including eCommerce, travel, and education. In 2018 there were over 25 billion transactions on BNPL’s platform, with an average value per transaction of USD 1 million.
The global market is expected to grow at a CAGR of 20% through 2022 as more people gain access to financial services like peer-to-peer lending through mobile phones or internet browsers.
Is BNPL better than Credit Cards?
Credit cards are a better option for long-term purchases or better deals and discounts. However, they have strict eligibility criteria. Not everyone is capable of getting a credit card. Also, many companies demand hefty interest rates.
BNPL, on the other hand, does not have any restrictions on whether you can apply for it. Another benefit of using BNPL over other lending options, such as personal loans, is that there isn’t any need to give away your property in return for funds.
Is BNPL a better option than small Personal Loans?
When you think of small personal loans, the first thing that strikes your mind is the lengthy paperwork process. The application form and documents needed to be filled out, along with proof of address, apart from other things that need to be submitted.
Imagine how much time this would take if you were applying for a small personal loan amid a busy schedule at work or school. Therefore, people prefer the buy now and pay later option because it makes their lives easier because they don’t have to go through all those hardships.
However, millennials have found comfort in ‘buy now pay later‘ because of its unique features and benefits. In the age of technology, people are increasingly turning to online platforms for their daily needs. With new developments and innovations in the credit industry, it is now easier than ever to get a short-term loan like BNPL.