Buy Now, Pay Later in India: A Comprehensive Guide

Buy Now, Pay Later in India: A Comprehensive Guide

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Innovative payment options are transforming how individuals purchase and manage their finances in the constantly changing world of consumer finance. ‘Buy Now, Pay Later’ (BNPL) is one such groundbreaking idea whose popularity has skyrocketed in recent years in India. Although this kind of payment offers customers a level of ease and flexibility that was not possible before, there are a few things to keep in mind.

This article studies Buy Now, Pay Later in India, examining how it operates, qualifying requirements, and reviewing the benefits and drawbacks.

How Does Buy Now, Pay Later Work?

Buy Now, Pay Later is a financial service that enables consumers to make purchases and defer the payment for a later date. This payment model has gained immense popularity in India, largely due to the convenience it offers. Here's how it typically works:

  1. Selecting Buy Now, Pay Later as a Payment Option

    When shopping online or at participating physical stores, consumers have the option to choose ‘Buy Now, Pay Later’ as their payment method during checkout. It is usually listed alongside other traditional payment options, like credit cards, debit cards, and digital wallets.

  2. Creating an Account

    To utilise Buy Now, Pay Later services, consumers need to create an account with a Buy Now, Pay Later provider. Several Buy Now, Pay Later companies operate in India, including well-known names like Paytm, ZestMoney, and Simpl. Creating an account often involves providing basic personal and financial information.

  3. Understanding the Approval Process

    Once an account is created, the Buy Now, Pay Later provider assesses the user's eligibility for the service. This process may include a credit check or an evaluation of the user's financial history and creditworthiness. Eligibility criteria can vary from one provider to another, but many Buy Now, Pay Later services are designed to cater to a wide range of consumers, including those without a strong credit history.

  4. Making a Purchase

    After approval, consumers can proceed with their purchase. They can choose the items they wish to buy and select Buy Now, Pay Later as the payment option. The Buy Now, Pay Later service provider typically covers the cost of the purchase upfront on behalf of the consumer.

  5. Getting to Know About the Payment Terms

    Here's where the flexibility of Buy Now, Pay Later comes into play. Instead of paying for the entire purchase upfront, users can often choose from a variety of payment plans. Common options include:

    1. Zero Interest EMI: This plan allows users to split the cost of their purchase into equal monthly instalments over a specified period, usually without any interest charges. For example, a user might opt for a 3-month EMI plan for a smartphone.

    2. Low-Cost EMI: Some Buy Now, Pay Later providers offer EMI plans with a low interest rate, making it more affordable for users to spread their payments over time.

    3. Pay Later: In this option, users are granted a grace period during which they can pay the entire amount due without incurring any additional fees. This period can range from a few days to a month, depending on the Buy Now, Pay Later provider.

  6. Understanding Repayments

    Users are required to make payments according to the chosen plan. These payments are typically automatically deducted from the user's linked bank account or debit/credit card on the scheduled due date. It's crucial to ensure that the account has sufficient funds to cover these payments to avoid possible late fees or penalties.

  7. Learning About the Additional Purchases

    Once a user has established a relationship with a Buy Now, Pay Later provider and has a track record of timely payments, they can often make additional purchases using the same account, further enhancing their convenience.

What is the Eligibility for Buy Now, Pay Later in India?

The eligibility criteria for Buy Now, Pay Later services in India may vary depending on the provider. However, BNPL providers generally aim to make their services accessible to a wide range of consumers, including those who may not have a strong credit history. Here are some common eligibility factors:

  1. Age Requirement: Users are typically required to be at least 18 years old to use Buy Now, Pay Later services.

  2. KYC Documentation: Users may need to provide Know Your Customer (KYC) documents, such as an Aadhar card, PAN card, or passport, to verify their identity.

  3. Income: Some Buy Now, Pay Later providers may require users to have a minimum monthly income to be eligible for their services. This is to ensure users have the means to make the necessary repayments for their purchases.

  4. Credit Check: While Buy Now, Pay Later services are often more lenient than traditional credit cards when it comes to credit history, some providers may still perform a basic credit check to assess a user's creditworthiness. However, many Buy Now, Pay Later services cater to individuals with no credit history or limited credit history.

  5. Bank Account: Users are typically required to have an active bank account in India to link with the Buy Now, Pay Later service for automated repayments.

The particular qualifying requirements of the Buy Now, Pay Later provider in which you are interested must be verified because they can differ greatly. A pre-approval process is offered by several suppliers, enabling customers to determine their eligibility without having their credit score affected.

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Advantages of Buy Now, Pay Later

Buy Now, Pay Later services have gained popularity in India for several compelling reasons. Here are some of the key advantages:

  1. Financial Flexibility: Buy Now, Pay Later allows consumers to make purchases without having to pay the entire amount upfront. This flexibility is especially valuable when dealing with unexpected expenses or when making significant purchases.financial details.

  2. Interest-free Options: Many Buy Now, Pay Later providers offer interest-free EMI options for a specified period. This means users can spread their payments over time without incurring additional interest charges.

  3. No Credit Card Required: Buy Now, Pay Later services provide an alternative to traditional credit cards, making it accessible to those who may not qualify for a credit card or prefer not to use one.

  4. Quick and Convenient: The application and approval process for Buy Now, Pay Later services is often faster and more straightforward than applying for a credit card or a personal loan. Users can start using the service almost immediately after signing up.

  5. Budget Management: Buy Now, Pay Later services can help users manage their finances by breaking down larger expenses into manageable instalments. This can assist in budgeting and avoiding impulsive spending.

  6. Consumer Protection: Buy Now, Pay Later providers may offer dispute resolution mechanisms and customer support, enhancing consumer protection.

Disadvantages of Buy Now, Pay Later

While Buy Now, Pay Later offers numerous benefits, it is essential to consider the potential downsides and exercise caution when using these services:

  1. Accumulating Debt: The ease of making purchases with Buy Now, Pay Later can lead to overspending and debt accumulation, if not managed responsibly.

  2. Late Fees and Penalties: Missing payment deadlines can result in late fees and penalties, which can add up quickly.

  3. Impact on Credit Score: While Buy Now, Pay Later services may not require a strong credit history, late payments or defaulting on payments can still negatively affect your credit score.

  4. Hidden Costs: Some Buy Now, Pay Later providers may charge processing fees, making the overall cost of a purchase higher than initially anticipated.

  5. Impulsive Buying: The convenience of Buy Now, Pay Later can encourage impulsive buying behaviour, as consumers may be more tempted to make purchases without thoroughly considering their financial situation.

  6. Limited Merchant Acceptance: Not all merchants accept Buy Now, Pay Later as a payment option, which can limit its usability for certain purchases.

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Introducing KreditBee's Purchase on EMI: A Seamless Buy Now, Pay Later Experience

In addition to providing personal loans, KreditBee also offers an innovative ‘Purchase on EMI’ product, which is akin to the Buy Now, Pay Later concept. With this offering, you can enjoy the convenience of deferred payments while shopping at both online and offline stores through our extensive network of partners.

Whether you're looking to make a quick online purchase or indulge in some retail therapy at your favourite local store, KreditBee's Purchase on EMI has you covered. It is a versatile financial solution designed to make your shopping experience smoother and more budget-friendly.

So, whether you're eyeing that trendy gadget online or want to update your wardrobe at your neighbourhood boutique, KreditBee's Purchase on EMI is your go-to choice for flexible, hassle-free payments.


Buy Now, Pay Later has transformed the way Indians shop and manage their finances. It offers unparalleled flexibility and convenience, making it a popular choice for many consumers. However, like any financial service, responsible usage is essential to avoid potential pitfalls such as debt accumulation and late fees.

By understanding how Buy Now, Pay Later works, assessing your eligibility, and following responsible credit usage tips, you can make the most of this innovative payment option while maintaining control over your finances.

Frequently Asked Questions

Buy Now, Pay Later allows you to make purchases and delay payment for a specified period or through instalment plans. It often doesn't require a strong credit history and may offer interest-free options. A personal loan is a traditional financial product where you borrow a lump sum with a fixed interest rate and a set repayment schedule. It typically requires a credit check and is not tied to specific purchases.

Challenges faced by Buy Now, Pay Later include potential overspending, late fees, and the impact on credit scores if payments are missed. Additionally, regulatory scrutiny and competition within the Buy Now, Pay Later industry can present challenges.

Interest may or may not be charged on Buy Now, Pay Later, depending on the specific terms of the service. Some Buy Now, Pay Later providers offer interest-free options, while others may charge interest, especially for extended payment plans.

You can use Buy Now, Pay Later services at participating online and offline retailers. Many e-commerce platforms, retail stores, and even healthcare providers accept Buy Now, Pay Later as a payment option.

In India, Buy Now, Pay Later usage can affect your credit score. While Buy Now, Pay Later providers may not always perform a traditional credit check, late payments or defaults can negatively impact your credit score.

If you don't repay a Buy Now, Pay Later purchase on time, you may incur late fees and penalties. Additionally, your account may be reported to credit bureaus, affecting your credit score. In some cases, legal action may be taken to recover the outstanding amount.

Buy Now, Pay Later allows you to make purchases and delay payment for a specific period or through instalment plans. It is often associated with smaller, everyday transactions. EMI is a fixed monthly payment plan used for larger purchases, typically associated with credit cards or loans. It includes principal and interest and is usually for a predefined period.

Buy Now, Pay Later payment refers to the process of making payments for purchases made through Buy Now, Pay Later services. This can include paying in instalments or within a specified grace period, depending on the chosen payment plan. It offers flexibility in how you settle your bills for the items you have purchased.


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