What is the Future of BNPL Deals?
BNPL is the fastest evolving e-commerce payment method. It might achieve $680 billion in transaction volume globally in 2025. Another study found that the global BNPL market was valued at $4.07 billion in 2020, which can grow at a CAGR of 22.4% from 2021 to 2028. Gen Z and millennials, two of the largest demographics, are seeking an instalment-based alternative to traditional credit cards.
The BNPL option also fits the bill since it is a 100% digitised process, offers 1-year voucher validity and interest rates start at 0%*and the tenure ranges from 90–180 days. Moreover, the entire process is highly simplified with a quick disbursal option with basic eligibility and minimum documentation. Let us look at the reasons behind its popularity and why it has a bright future.
Why is BNPL a Preferred Payment Option?
India’s top digital lending companies offer BNPL as a retail financing solution. The lender pays the merchant on your behalf. For example, if you apply for a BNPL Big Bazaar loan between ₹3,000 and ₹60,000 with a 7-day interest-free grace period for each instalment. The money gets credited almost instantly as vouchers.. Redeem the voucher and spend on diverse categories like groceries, personal care and home and kitchen needs. You can buy anything almost immediately without paying from your pocket right away.
The EMIs are affordable and can be paid back at a later date. This acts as a breather since there is no immediate financial stress. Moreover, it results in better buying behaviour in customers aged 22–38 across India. This primarily benefits the salaried millennials who are new-to-credit cards or do not have credit cards. Further, cost-friendly EMIs make it easy to repay, boosting your credit score.
The lender does not analyse your traditional bureau score. Instead, the best digital lending company uses a Social Loan Quotient, an AI, ML, and smart analytics-based credit scoring system. It leverages smartphone metadata, social media footprint and basic KYC details along with your credit score to offer the credit. This is helpful for the younger generation who do not have a financial historyNo wonder that it continues to grow in demand and is in heightened competition with financial service companies.
The Future of BNPL Loan?
A BNPL payment is used for small purchases. Yet banks feel threatened since it is a more viable way to manage personal cash flow. The interest-free feature helps make a purchase that would otherwise not fit your budget, making it even more lucrative. Studies have found that 3 out of 4 Americans who made a BNPL purchase for the first time are more likely to continue even after the pandemic is over. Redseer estimates India’s BNPL market will touch $45–50 billion by 2026 from $3–3.5 billion in 2026. The number of customers will reach 80–100 million from 10–15 million, while the industry is predicted to surge over 10 folds within the next 4 years starting in 2021.
BNPL is an excellent opportunity for young adults to fulfil their needs even with low savings or a budgeted living. Simply download the pay later app on your Android or iOS devices. Rest assured, it will fund your small-ticket purchase quickly and easily.