One of the most popular payment schemes in the world of digital payments is the pay-later scheme. BNPL (buy now, pay later) reached extreme popularity during the pandemic. There is no doubt that this is why the digital payment method is so popular with millennials and GenZ customers. The company’s customer-centric approach, transparency, and flexibility are among the reasons it has become so popular.
With pay-later payments gaining popularity, a new fintech vertical has emerged. The BNPL industry has already reached $97 billion and is still growing.
The Convenience of Shopping
Online shopping is more convenient and fast for millennials and GenZ customers. Traditional methods of payment take a considerable amount of time to process. BNPL speeds up the process. Customers can complete their purchases now while paying later, which reduces the processing time by a considerable amount.
A 62% increase in usage between 2020-2021 indicates that the pay-later program is highly popular among those ages 18-24.
The Unavailability of Credit Options
The majority of financial institutions, including banks, won’t lend money to someone unless they meet a long list of requirements. As a result, people with low income, no income, and no credit score face difficulty qualifying for loans or credit cards. As first-time borrowers, GenZ customers are most likely to experience this.
Although BNPL has its own regulations and rules, it is not as strict as getting a credit card or loan. BNPL service providers use alternate data and AI to study a person’s profile before granting credit access. This allows first-time borrowers to get credit.
The BNPL payment method is actually a credit card that anyone can use. Furthermore, there are no interest rates, which make the payment method even more convenient. Users just need to ensure they repay the amount within a specified time frame.
Easy EMIs and Fast Refunds
The majority of people who prefer BNPL payment methods make small purchases with it. The digital payment program allows them to break down the purchase amount into small EMIs scheduled at a set number of days, weeks, or months. They are interest-free, which allows people to buy goods they wouldn’t be able to buy otherwise.
In addition to fast refunds, another thing that makes the BNPL program popular is that it provides a refund when you cancel an online order. However, it usually takes a few days before the refund is credited to your account.
The ‘Buy Now, Pay Later’ scheme offers instant refunds. The transaction is cancelled, and all obligations cease instantly.
As a result of its pay-no-interest-but-pay-later payment method, the buy now pay later program has garnered appreciation from customers worldwide. This service has been used by over 60% of Americans within the last two years due to its no-interest-but-pay-later payment method.