New Trends in e-Commerce: BNPL (Buy Now Pay Later)

Every business, big or small, has tons of value to offer in this world. Every start-up is critical to global economic prosperity, especially during an era where pandemics have different impacts on businesses.

During this time of COVID, we have all seen how everything gets shut down, right? We instantly shifted to frequent online shopping. Do you know that this shopping pattern has spawned many new concepts in the market? And one of them is Buy Now, Pay Later (BNPL).

What is BNPL in eCommerce?

Buy Now, Pay Later (BNPL) accelerates the growth of an online business. It is a microcredit model, where buyers pay a little for their online purchases through e-commerce outlets. Isn't it something that we have all been looking for so long?

Can you recall which mode of payment did you use during COVID? The worldwide epidemic has caused a significant shift in the digital payments ecosystem.

The online retail business is always high. The shift to digital payments and online shopping has given several sub-industry opportunities. BNPL will become more intricate as dealers strive to distinguish themselves in the marketplace.

Besides, we feel more inclined towards it as there is hardly any extra charge involved. Many BNPL services offer a constant interest rate—however, many others base interest rates on the purchase price.

Generally, a buy now, pay later transaction includes the possibility of something like prepayment fees or late fees. This also varies from one vendor to the next.

The Success of BNPL

The Gen-Z and millennial populations are making much more use of digital payments and smartphones worldwide. Over the last few years, the digital world has seen a significant uptick in online shoppers, especially in tier-2 and tier-3 cities. This is due to rising awareness about cashless payments and e-commerce platforms.

The current success of BNPL has forced many retailers and banks to modify their credit offerings for their customers. It is foreseen that this advancement will not slow down in the post-pandemic world. Therefore, companies like Shoplazza and Shopify have come up with a concept to change the existing models in the economy and alter the way customers think about credit.

The Future of BNPL

Who doesn't love shopping? Our favorite leisure time involves scrolling through e-commerce stores. Anyhow, we end up buying something. In the modern shopaholic world, nothing is as tempting as the idea of buying now and paying later. This is not a dream anymore!

As the name implies, buy Now, Pay Later (BNPL) can boost impulse buys and steer extra e-commerce sales. It is no surprise that BNPL is the next big payment trend online.

The buyers are always burdened with the pressure of paying the entire amount of the product all at once.

• With BNPL, we simply get the opportunity to pay for goods and services in installments.
• Buy Now, Pay Later gives users the convenience of buying without burning their pockets at once. This is why you should consider it a good form of payment even beyond the pandemic.
• It is an excellent option for expensive items.

Conclusion

The concept of BNPL in e-commerce is straightforward yet impactful. Consumers make online transactions. Rather than paying the amount upfront, they make payments in installments over time.

This functions by engaging customers in a contract that makes it important for them to make payments of principal and interest in the future. It can also be seen as an online form of a traditional loan.

Much like the layaway model and how credit cards work, it is a popular shopping option in which consumers set aside items and pay for them over time. It allows the sellers to move products quickly out of inventory.

Where will BNPL lead the e-commerce industry to? Let’s wait and see.

(Contributed by Sunita Negi & Hermes Fang)