Buy now pay later for dummies

This #PayDecoding, Buy now pay later for dummies helps you to keep up appearances in front of your kids… and push your expertise a little further!

 


 

“Buy now pay later” (BNPL) is simple: instead of paying for your online purchase immediately, the provider of this service pays the merchant for you. You then agree to pay them back in installments, allowing you to spread the cost.

The BNPL is precisely the “Pay after delivery”. The payment is independent of the act of purchase.

The customer leaves immediately with the good and chooses, with the service provider, the terms of payment on a schedule ranging from several days to several weeks.

This differs from the “Installment” payment method is mainly the fact that you don’t have to pay anything on the day of purchase.
(Want to know more about the difference between both?).

Perfectly integrated into the payment options, the BNPL creates a very strong compulsive buying situation. Especially since suppliers often charge no interest and sometimes no late payment fees.
In the absence of obvious upfront drawbacks, BNPL adoption is booming, especially among Generation Z and millennials.
For merchants, it’s a way to increase sales, have better conversion at checkout and even save on interchange fees.

On the other hand, for the customer, this type of payment is not without risk.
Spreading out payments is convenient, but you don’t get the same protections as credit cards:

  • payments that are harder to track.
  • missing or late payments result in fees
  • payments may continue even if the item is returned (as refunds may be longer and delayed).

In addition, there is the danger of getting carried away and buying much more than you can afford.

In 2021, regulators in many countries (UK, Sweden, Australia, US, etc.), alerted to the risks to consumers, are considering better regulation of BNPL.

 


 

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