Buy Now Pay later Model: With the changing times, there is also a big change in the shopping model in the country. Till a few years ago, where credit cards were used the most for shopping. Whereas now it has been replaced by ‘Buy Now Pay Later’ (BNPL) model. Many e-commerce websites and start-ups including Amazon and Flipkart are offering the option of BNPL to their customers today. In which you can buy goods now and pay them later.
Many third party service providers also give the option of BNPL to the customers. Among these third party service providers, Sezzle, Afterpay, Quadpay, Klarna and PayPaybright are the most commonly used. These third party service providers provide the facility to convert the payment for your shopping done on the e-commerce website into EMI. While some third party service providers take interest from their customers for this, some service providers provide this facility without any charge.
Need to complete KYC
For this, you have to complete your Know Your Customer (KYC) on these websites and start-ups. For which you have to submit your PAN card and Aadhar card details.
Companies give 15 to 45 days for payment to customers opting for BNPL. You can pay your shopping amount in lump sum or in EMI if you want. However, whether you will be able to use this feature or not depends on many things. Whether you will be given goods on credit or not is decided by the algorithms process.
What is the business model of BNPL
Their business model is very simple. Like you did some shopping of 1000 rupees. Now you choose the third party service provider and choose the option to pay this amount in four installments. The third party service provider will already pay Rs 940 to the e-commerce website. Currently, third party service providers get a commission of 6 percent from these e-commerce websites.
For the goods that you bought for 1000 rupees, the third party service provider will deduct 6 percent commission and give 940 rupees to the e-commerce website. After which you will pay 1000 rupees to the third party service provider in four separate installments. In this process, where your shopping will become easy, third party service provider will also get the benefit of 60 rupees.
Many e-commerce websites offer the option of BNPL
According to market experts, the launch of Amazon Pay Later and Flipkart Pay has helped them a lot in increasing their sales. Fintech and PhonePe and Paytm have also entered the BNPL segment. Similarly, Ola has also started its BNPL facility, Ola Postpaid.