What Makes the Buy Now, Pay Later Trend So Popular ?
The Growing Popularity of the Buy Now, Pay Later Trend
As more and more Indian consumers choose digital channels as their preferred choice for making small and big purchases, the unswerving rise in digital commerce has organizations scouting for new and novel ways to improve customer experience.
Although the last few years have witnessed tremendous transformation with different (and more convenient) payment and delivery options, the ‘buy now, pay later,’ trend is quickly catching up – and is here to stay.
The need for “buy now, pay later”
As the online shopping space becomes increasingly competitive, Indian customers are spoiled for choice. Since most eCommerce companies offer more or less the same products, what really differentiates from the other is the convenience they offer to customers. While UPI, eWallets, and payment at delivery have been popular in the Indian eCommerce game, the latest buy now pay later trend is taking the industry by storm.
By allotting a certain credit amount to consumers for a few days – with no processing, down payment, or interest fee – the trend is enabling consumers to make purchases without any upfront payment deduction. Today, several companies such as LazyPay, SlicePay, Simpl, ZestMoney, ePayLater, Amazon Pay, etc. are offering this payment option to customers across platforms, empowering them with instant credit approvals to make quick and stress-free purchases.
The reasons for its popularity
In an era where customers have the luxury of surfing through hundreds of thousands of product and service options at their fingertips, the online shopping space has become extremely lucrative. To make the shopping experience far more convenient, hassle-free, and enjoyable, the buy now pay later trend is enabling customer gratification like never before.
The trend has become the need of the hour in pandemic-struck India, as it makes short-term credit lending a reality – helping consumers with unemployment, salary cuts, and other monetary issues meet their grocery, medicine, utility, lifestyle, and fashion needs and wants.
Here are some reasons why the trend is becoming so popular:
- Enables consumers to enjoy products/services without worrying about immediate payment: Very often, customers come across a product they want to purchase but aren’t able to because they don’t have the budget. Buy now pay later enables such customers to buy the product and reap its benefits – without worrying about immediate payment. They can buy the product, use and enjoy it, and make the payment at a later date – as agreed.
- Allows for impulsive purchases: Unplanned or impulsive purchases are very common in the eCommerce world, especially since customers have quick and easy access to thousands of products at their fingertips. Customers that chance upon a product they really like and want to buy it in an impulse – without any prior planning – can now make that purchase without second thoughts. The buy now, pay later allows such customers to make quick and impulsive purchases and enjoy the benefits of the product immediately.
- Helps avoid interest when payment is done before due date: Although personal loans have been commonplace in the digital commerce world, most charge customers with a substantial interest rate that adds to the overall cost of the product or service being purchased. Buy now pay later eliminates this interest, allowing consumers to enjoy the product at its price. Interest is calculated and compounded differently by different vendors only when the payment is delayed.
- Helps to repay in installments and spread the cost of larger purchases: For customers looking to make costly purchases, buy now pay later provides the flexibility to spread the cost over a period of time. They have the freedom to choose an interest-free installment plan that suits their specific needs and easily and make purchases conveniently – avoiding financial tight spots or straining their bank accounts.
- Shortens the time taken to shop: In addition to enabling customers to pay for the products they buy at a later date or in installments, buy now pay later also speeds up the checkout process. In contrast to standard checkout, the trend allows customers to check out quickly and easily with just an email address and password. Because they get the option to pay over time, they can avoid the hassle of filling out an application or enduring a credit check —leading to higher checkout conversions.
Empowering customers in a digital world
In an eCommerce ecosystem where competition is constantly intensifying, empowering the modern customer with convenient payment and delivery options has become critical for differentiation. Although payment at delivery has long been the favorite payment method of Indian customers, the new buy now pay later trend provides the desired flexibility to make payments in fixed (or flexible) installments, shifting the power to decide when and how to pay in their hands.