BNPL is buy now and pay later

It's basically we are buying the products and services completely but we will be paying in smaller amounts such as installments without interest.

BNPL is basically the new generation app which works like a traditional credit cards . BNPL is an app that provides instant form of short term credit.

Examples of BNPL apps in India and Global

India: ZestMoney, Simpl, LazyPay, Paytm Postpaid, ICICI PayLater

Global: Klarna, Afterpay, Affirm, Zip

The significance of BNPL in today's world

1. Lifestyle driven approaches : Today's generation wants to purchase premium lifestyle products including gadgets travel fashion and beauty without paying them and there.

2. Easy to use and accessible :

Approval process is instant and includes no complex paper work. It has got integration with all the e-commerce websites like Amazon Flipkart Myntra Nykaa etc.

3. Extension to digital payment methods

BNPL is basically an extension to the world of digital payments. It helps in evolving digital modes of payments like OR codes , UPI and Wallets. Consumers are comfortable with app based credits.

4. This method of BNPL is bringing a new bunch of shoppers who earlier use to avoid credit card usages. The BNPL apps helps them to buy and make purchases in the field of fashion , beauty products , gadgets and online courses.

Negative Impact of BNPL in today's world

1. Debt trap risk

Since it's accessible and easy to use , people often purchase more than what they pay and eventually hurting their credit score.

2. Regulatory oversight

RBI and global regulators need to monitor the BNPL apps very closely for responsible lending

3. Financial Literacy Gap

Many users don't understand the functionality of BNPL apps and ended up of not getting with the terms like how late fees affecting credit reports.

Emerging trends within BNPL

1. BNPL apps are getting place in daily life like extending into groceries, bill and even to education.

2. Fintech companies are merging with daily lifestyle purchases and money management and provides loyalty points , cashbacks and credits.

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