Tuesday, Aug 9, 2022
Business

Buy Now Pay Later Vs. Credit Card: Know Which Suits Your Business

Credit cards have unquestionably facilitated the reduction of stress in our daily lives. It enables you to make purchases even if you do not currently have the necessary funds in your bank account. In light of this, having a credit card may be of great assistance, even if your current account balance does not let you pay for the item in question.

There are several instances in which if you do not possess a credit card or if your request for a credit card is denied, there is an additional cardless alternative known as “Buy Now Pay Later.” Therefore, if you choose this alternative, you will be able to obtain credit without having to pay interest on the amount provided that you pay it back by the due date. It gives you the freedom to buy something you desire right now, even if you don’t have the money to pay for it right away.

BNPL Vs. credit card

The majority of the time, BNPL services do not impose yearly fees; however, some of them do charge interest on purchases, and the vast majority of them do impose late fees in the event that one or maybe more payments are missed. Whenever you sign up for a BNPL plan, there is a possibility that the interest charges and late fees associated with “Buy Now Pay Later” may not be presented in a clear and concise manner. These costs can be rather high.

When you make any purchases through BNPL, it may seem like a wonderful method to keep track of your finances; nevertheless, owing to the varying schedules for payment installments, “Buy Now Pay Later” may make it more difficult for you to keep records of this when your payments are due.

A further compelling reason for credit card issuers to consider investing in BNPL may be the current climate of increased competition. The most common establishments that are in charge of issuing credit cards are banks, but technology companies are beginning to make inroads into these profitable areas of business.

More flexible payment schedule

Whenever it comes time to pay off items that have been put on a credit card, you often do not have the opportunity to set payment plans that will allow you to gently pay off that product over time unless you somehow pay the interest that is accrued on balance.

Every service that BNPL provides has its own unique payment plan, and these plans differ in the total number of payments that must be paid off before the item can be considered paid in full. You can click here to know more about this in detail.

Repayment

Users of Buy Now Pay Later are not required to pay any interest on the money they borrow to pay for their purchase because the service does not charge interest. Credit cards often provide interest-free periods on purchases for a length of time that is roughly equivalent to the repayment window for the Buy Now Pay Later payment option. In contrast to BNPL, throughout this period of time, there will be no interest charged, and you will not be required to make any payments in installments.

Conclusion

If your customer does not already have a credit card, arranging credit for BNPL services can be done at the point of purchase, simplifying the process of obtaining credit much quicker. The choice depends upon your business model and how you would like to get the payment. However, BNPL would definitely help you in getting a wider reach for people who want to purchase your services or goods but do not have enough funds or a credit card.