If you are an online shopper, you must be familiar with “Buy Now Pay Later” schemes. These schemes are especially famous on foreign shopping websites. However, nowadays the Nepali market is also slowly adapting to the trend. Mostly in high-cost merchandises.
But is this scheme worth it? Let’s take a deeper look at this.
BUY NOW PAY LATER what is it?
Buy now pay later schemes does precisely what they say. That means you get the opportunity to buy something without having to pay for it until a later date. Also known as the point of sale credit, some schemes give you 30 days to pay while others allow you up to 12 months. In general, if you repay the price of what you bought within the delay period you won’t pay any interest. That’s because these periods are usually interest-free.
If you use buy now pay later carefully you could delay paying for something for several months, or even a year, and not pay a penny in interest. Many of the big firms won’t charge you any interest if you clear your balance before your delay period is up – even if you only pay the day before. Alternatively, some offers allow you to spread the cost over a longer period but interest may be charged at a high rate, for example, 39.9% APR.
POSITIVE SIDE OF BNPL
Buy now pay later schemes are very useful and helpful for the customers. These schemes allow customers to :
- If payment is paid before the limit, then it means no interest for the payments due.
- This scheme comes in great handy for emergency purchases when money is not enough.
This scheme also provides sellers with some great benefits such as:
- It eliminates a lot of hesitation of shoppers.
- Increasing average order value and sales.
- Provides a holistic and pleasant branded customer buy experience.
- Opens a new stream of income from the interest rate, after a limited amount of time is passed.
ANOTHER SIDE OF BNPL
Although buy now pay later schemes seems great, yet it has another side. The problems that can be found with this scheme are:
- This makes impulse shopping so much easier, making a regrettable credit due later on.
- The providers decide when the amount gets auto deducted from your account which is always non-negotiable.
- These types of providers do not have a credit check which may result in abuse of the system.
- Your due may hamper your loan application.
- For sellers, they do not receive any money although the stock is decreasing.
Buy Now Pay Later In Nepal
To date, “buy now pay later” schemes are mostly seen in high-cost products like automobiles.
For example the official dealer of Nissan- Datsun, Motorcorp has released the BNPL scheme. They have provided their automobiles with a limit of 6 months. There will be no interest charge till then. In the offer, the buyer has to pay 50% of the down payment and institutional customers have to pay a 30% down payment. If the customer is unable to pay the whole 50% down payment amount they can also buy a car with 30 percent at the beginning and the remaining 20 percent within four months, the company said.
Likewise, the furniture store like S.B Furniture has also started the scheme. And now joining the trend is newly opened clothing stores like Missio.
But Missio wittily used the scheme as wear now and pay later.
As we can see the By now pay later scheme has its pros and cons.
So would you consider it a great scheme or a risky buy?