BNPL has become an increasingly popular and convenient payment option provided by most retailers since more and more shoppers have shifted to online shopping, especially during the pandemic. Here’s everything you need to know about “Buy Now, Pay Later”, its pros and cons, and whether you should use it.
What is BNPL?
Buy now, pay later (BNPL) is a form of short-term financing, allowing customers to spread the cost of their purchase over a number of installments, interest-free. The first installment is paid upfront, and the remaining installments will be paid over a predetermined period of time. These are billed to the customer's debit or credit card until the purchase is paid in full. Due to its convenience, it is a payment option that is increasingly being adopted by more and more big retailers.
Depending on the plan, some of the BNPL providers require a small interest fee, while others require zero cost and no interest at all. These providers also have simple eligibility requirements and fast approval, while terms and conditions may vary from one provider to another. BNPL payment plans can often be found when you shop online, although there are many plans available both online and in-store.
How does BNPL work?
BNPL payment options are offered at checkout. During checkout, customers will see an option that allows them to split the total cost of your purchase into smaller amounts with the first installment made up front. The application process is fast and simple: it may ask for information, including your name, email, and phone number, besides a payment method of the customer's choice, either a debit or credit card.
By choosing buy now pay later during checkout, the BNPL provider (like cashew) will pay the shops in full, and the customer will repay the BNPL provider in installments. So the service provider assumes the risk for shops and is responsible for handling installment payments and late payment issues.
What are the pros of using BNPL?
BNPL payment options are a convenient way to buy items and services without paying for them immediately. Here are some of the pros of using BNPL to look out for:
- Installments equal comfort in payment. Taking your time to pay for your purchases in installments is not only convenient but also offers the ease of spreading out the cost of especially bigger bargains and higher-value items.
- No hidden fees. Most BNPL providers including cashew charges no additional cost to you for dividing payments over a number of installments. Therefore, the customer pays exactly the price of the items purchased without the excess cost of interest.
- Fast approval. At checkout, the request is usually approved within seconds after a fast check is performed on your credit or debit card to determine your eligibility.
- Flexible payment duration. cashew offers flexible payment terms like 3, 6, and 12 interest-free installments.
Why should you take advantage of BNPL?
BNPL ensures a reliable payment process for shoppers, whether online or in-store. With only one installment paid upfront and immediate access to your purchased items, in addition to the perks of zero interest fees and no hidden costs, BNPL is a convenient and smart way to secure all your needs hassle-free.
What is the best BNPL provider in UAE?
Learn more about cashew, a powerful buy now, pay later platform that allows its customers to shop now and pay later in equal monthly installments. cashew offers a point of sale payment plan with curated credit lines and an option to split payments into installments or delay them to up to a fortnight.