Buy Now Pay Later

A lending or a payment service

BNPL (Buy Now Pay Later)

The credit limit for BNPL is very low as compared to a normal credit card limit.

BNPL billing cycle is usually 15 days and the repayment window is 5 days from the bill generated date.

Source: - LinkedIn

Customer Centric Features

• Pay online on supported merchants

• Pay utility bills with the provided credit line

• 15-day zero-interest repayment cycle

• Discounts and offers on merchants

• No KYC documentation required

• It helps to build a credit score

Benefits for merchants

• Builds customer trust

• Attracts new customers

• Generates more business from existing customers

Basically, it increases customer conversion and retention.

Merchants tailor solutions

End Use

• Open

• Locked

Repayment

• EMI

• Bullet

Interest

• Subvention (paid by merchant)

• Customer/borrower

BNPL Variants

Its all about permutation and combination of End use, Repayment and Interest.

• Locked + EMI + Subvention

• Locked + Bullet + Subvention

Above mentioned are the most common one used pay LazyPay, Simpl, Paytm Postpaid, Amazon Pay Later etc.

Where as there is other side as well i.e. credit to merchant which is been used by Bharatpe & Paytm. Now Phonepe & Gpay also following the same.

• Open + EMI + Borrower (merchant)

• Open + Bullet + Borrower (merchant)

From lender point of view it help them to

• Acquire new customer

• Scale the portfolio

• Cross sell

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Views expressed are personal. Please be free to give your suggestions/inputs or counter-arguments. I will be happy to discuss them. You can follow me on LinkedIn or Twitter