Mechanisms of Buy Now Pay Later

BNPL (Buy Now, Pay Later) applications are just what their name suggests. Buy Me Later/PayPal Credit, Afterpay, Affirm, Klarna, and FuturePay are all popular Buy now pay later apps.

BNPL is an idea of finance that makes it easy for the prospective customers to obtain credit, loans and other options for consumer expenditures. As this option has become more commonly accessible, consumers’ obstacles to entry in the credit world are reduced, while retailers’ client base is going up. On July 13th, 2021, it was revealed that Apple’s Apple Card, in collaboration with Goldman Sachs, would launch a BNPL-like product.

What makes it different from using a credit card?

Credit cards and BNPLs are comparable in that they both give borrowers the option of deferring repayment. However, there are many differences between the two. Mobility is the first and most crucial factor.

While getting a credit card requires an excellent credit history and a lengthy verification process, BNPL makes getting credit easy. You might easily choose the BNPL option at the point of purchase whether shopping on an e-commerce portal or paying your electricity bills.


Credit cards have various costs, fees and charges, for example, you have to pay one-time application fee, yearly cost that you have to pay repeatedly, and so on, which is even higher for premium cards. BNPL, on the other hand, is free of such fees.

In India, how common is BNPL as a payment method?

Due to e-commerce booming and digital payments, low credit card usage, and a rapid increase in the number of fintechs disrupting traditional credit access methods, traditional credit access methods are being disrupted. BNPL is the most popular product among GenZ consumers, young millennials, and first-time credit borrowers, who are frequently neglected or overlooked by traditional banks.

What are the benefits of using BNPL’s services?

BNPL service providers frequently use cutting-edge processes to assess an applicant’s creditworthiness; as a result, the customer procedure of onboarding is usually quick and painless, with no requirements of papers or joining fees. The entire procedure is digitally enabled via internet-connected mobile devices such as smartphones and laptops, which are frequently used in conjunction with certain applications. After a line of credit has been authorized depending on the user’s trustworthiness and income, a BNPL service provider issues it to the user.


Users should remember that a BNPL facility is still a loan that must be returned in full and on time in order to prevent penalties and a negative impact on their credit scores. They shouldn’t be enticed to spend impulsively because they have easy access to credit, no interest costs, and a growing number of collaborating shops. As a result, they must use BNPL services with financial restraint and consideration.

The Bottom Line

BNPL service providers are continually adding new shops to their networks, but they should still sign up with a top-rated dealer who is linked with the merchants they use the most. They should also properly read the fine print of their chosen BNPL service provider before signing up to ensure that they are aware of all of the features and penalties. They should also only employ BNPL services from organizations that are reliable and easy to trust and be wary of players who, for example, demand excessive permits in relation to the services they supply.

Your CIBIL score online in India can help you receive the BNPL card deal of your choice. This is because a purchase now, pay later card is an unsecured choice that necessitates a high CIBIL in order to ensure a big credit limit.