Buy now pay later (BNPL) is short-term financing offered at the point of sale for customers purchasing, as a finance option. BNPL cuts through a lot of processing by the very way it operates converting a due into a loan at a click. This immense optimization has made it a go-to option for a lot of consumers, particularly tech-savvy younger consumers who are first-time credit borrowers and require microcredit, often overlooked by traditional banks and other primary financial institutions.
In traditional lending, the risk is often placed on one customer for a big amount, in BNPL risk and the amount is distributed among several customers drastically cutting down the risk for lenders.
Statistics show that BNPL is the fastest-growing online payment method and it is expected to grow from 3% in 2020 to 9% in 2024. Surveys show that e-commerce business will be a $99 billion market by 2024 and the BNPL market in India is expected to grow from $3.5 billion today to $50 billion by 2026. Customers using the service will be a staggering 10 crore in India soon.
Since the pandemic, there is no stopping BNPL as the need for it has escalated tremendously with the advantages it brings. They are:
- No cost EMI.
Customers not having to pay anything extra over the product price at the convenience of making the product price payment over a tenure.
- Increases affordability.
The benefit of paying a large sum as simple as small monthly payments enormously increases affordability and sales.
- Immediate access to credit.
Traditional processing to issue credit is absent instead, technology is used to grant credit in seconds.
- Easy to get approved.
Credit scores and other detailed verifications are not required making approval easy to get.
- Simple, secure, and transparent process.
BNPL is a few steps process that is precise and clear.
All these advantages of BNPL make it a win-win for both the customers and lenders. BNPL together with technology brings about an immense effect. Technology is everything in BNPL as it happens without any in-person interaction in getting it done, which is also the salient feature of BNPL. Technology like digital signature enabled BNPL to make it a completely contactless process. Technology gives the edge for BNPL over credit cards which still require quite a bit of documentation and processing.
Digital lending guidelines have come out greatly promoting the digitization of credit delivery. The role of technology is now significant and inevitable. With AllCloud Unified Lending Technology you can create and manage BNPL credit products effortlessly within compliance and scale the market for your business immensely assuring you high returns.
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