What is Buy Now Pay Later (BNPL), How it works, Pros and Cons

Buy now, Pay later is an option which has been introduced in many countries many years ago and in India too this option has been available for a long time. But in recent times Buy now, Pay later is becoming very popular. Nowadays, many companies have started giving the option of Pay later. 

Even today, very few users are aware about it and many users have no idea about it at all. So in this post we will try to give complete information about Buy now, Pay later so that any person can use it if he wants and he does not face any kind of financial problem.

What is Buy Now, Pay Later?

Buy now, Pay later is a credit facility that is being offered by many companies in India today. It is absolutely interest free credit. Using this credit the user can make any online payment as well as make offline payment. If the repayment is done within 30 days, then no late fee or interest of any kind has to be paid. 

It is very easy to avail BNPL credit limit as compared to availing any other credit limit. Many BNPL providers require only PAN card and give credit limit to the user only through PAN card. Let us further try to know more information about BNPL like how safe is BNPL.

How does Pay Later work?

Let us tell you how BNPL works and how users can use it. 

First of all, the Pay Later account has to be created and activated. Before activating the Pay later account, you have to decide which company you are going to use Pay later. Nowadays, many companies are offering the option of Pay later with different terms and conditions.

After the account is activated, the user gets a credit limit. Using the credit limit of that BNPL, one can immediately purchase the product or service from any platform of his choice and the repayment has to be done after 1 month. One can only buy goods within the credit limit, no one can buy more than the credit limit.

Is Pay Later safe?

Most of the BNPLs present in India work according to the guidelines made by RBI. Along with this, you should also know that all the e-commerce platforms or other types of financial apps that provide you the option of BNPL are linked to some Indian bank only then they are able to provide the option of BNPL.

For this reason, BNPL is considered quite safe, but you should also know that from time to time some BNPL fake and unauthorised apps also come in the news which keep cheating the users. So you should stay away from these types of BNPL.

What is the “buy now pay later” option by Flipkart?

What is the “buy now pay later” option by Flipkart?
What is the “buy now pay later” option by Flipkart?

For the first time, Flipkart started offering Buy Now Pay Later option on its platform in 2017. At that time this option was only for a few selected users but now a days BNPL option on Flipkart is available to every user who follows the terms and conditions of BNPL and Flipkart.

Flipkart’s BNPL option gives users a credit limit of up to ₹100000. Using this credit limit, the user can buy any product from Flipkart, Myntra, and Shopsy etc. Apart from this, one can recharge the mobile and also take any subscription.

Also Read : Pros and Cons of Buy Now, Pay Later You Should Know

The Flipkart Buy Now, Pay Later option is processed by IDFC Bank. If we talk about repayment, then repayment has to be done to Flipkart on 5th of the next month, now EMI option has also started coming in Flipkart Buy Now, Pay Later.

What is the Pay Later option in UPI?

If this question is coming in your mind that what is pay later option in UPI? So let us tell you that the work of giving pay later in UPI option is being done by RBI. In the coming time, you will start getting pay later option in every UPI app.

If you have activated a pay later account such as amazon pay later, Flipkart pay later, then you can link it to your UPI and pay to any merchant. Just like you used to use pay later to buy any item from any platform, in the same way you will be able to make payment through UPI pay later also.

Let us tell you that you cannot transfer money to your bank account through UPI pay later nor can you send it to anyone else’s bank account. You can only make payment to any merchant through UPI pay later.

Best Pay Later apps in India

Best Pay Later apps in India
Best Pay Later apps in India
  • Postpe 
  • LazyPay
  • MobiKwik Zip
  • Flipkart Pay Later
  • Amazon Pay Later
  • Slice
  • Zest Money
  • Freecharge Pay Later
  • Money Tap
  • Paytm Postpaid
  • Pay Later by ICICI bank
  • Ola Money Postpaid

So these are some of the best BNPL apps which are available in India and they are providing very good service in present time. You can use any pay later app according to your credit score or your requirement.

Is buy now, pay later available in India?

Yes, buy now, pay later is available in India and many digital lenders are present in India today to provide the option of buy now, pay later. Let us tell you that today many users are also using the buy now, pay later option. The bank which is most involved in BNPL is IDFC First Bank.

Does Amazon offer BNPL?

Yes, let us tell you that Amazon gives the option of BNPL. Mostly credit limit up to 60000 is given by Amazon. To activate it, you must be above 21 years of age and must have a PAN card. If you do not have a good credit score, then you will not be able to use Amazon’s BNPL.

Who is eligible for BNPL?

Let us tell you what your qualification should be if you want to use BNPL. The points we are going to tell you below will be applicable to most of the BNPL apps.

  • Your age should be 18 years or more than 21 years and your age should be maximum 55 years. You should not be more than 55 years of age.
  • You must have some income source. But you will not have to provide proof of income source.
  • You must have a UPI linked bank account.
  • You must have a PAN card and Aadhaar card to get BNPL activated.
  • Your Aadhaar card should be linked with your mobile number, so that you can verify Aadhaar with OTP in BNPL.
  • Video KYC is also required in some buy now pay later applications. So for this you must have a good internet connection.
  • Your credit score should be more than 720, only then you can get approval from pay later. Otherwise you will be left with only a limited number of pay later options.

If you have the above mentioned skills, then you can very easily get credit limit in any pay later application.

Is BNPL interest free?

Is BNPL interest free?
Is BNPL interest free?

Yes, buy now pay later is absolutely interest free, you do not need to pay any interest or fees on its use. Let us tell you that on activating some BNPL, a small amount has to be paid as processing fee. Otherwise, you do not have to pay any kind of charge for BNPL, you should keep in mind that if you do not repay the credit limit used on time, then you will have to pay late fee / interest.

Why Buy Now, Pay Later going famous?

This question keeps coming very fast in the mind of many people that why “Buy Now, Pay Later” is becoming famous all over the country so fast. Nowadays, people of many countries are using “Buy Now, Pay Later”.

So let us tell you that according to many reports, it has been proved that when inflation increases in a country and due to which interest rates on other loans increase, then the use of “Buy Now, Pay Later” increases rapidly in that country.

Also Read : Slice Pay Later Activate, Fee, Interest, Fake or Real

This is because no interest of any kind has to be paid in Pay Later. It is absolutely interest free and also gives the option to buy all the items that are needed. That’s why most of the users start using Pay Later in this type of condition.

Apart from this, many people do not like to make payment by repeatedly entering debit card / credit card details for online purchases, hence they use Pay Later which allows payment in one click.


BNPL is not EMI, but a different type of credit limit, using it any product/service can be purchased or any bill can be paid and this money has to be returned in the next month. BNPL is different from EMI to a great extent, but in some BNPL, EMI option has also come.

That means you can buy any product or item and you can return that money in the form of EMI not once in the next month.

Can banks offer BNPL?

Yes, Banks can also provide BNPL service, currently BNPL service is also being provided by ICICI Bank, IDFC first bank but only a few banks are providing this service at present. You can also take service of BNPL from your bank if your bank is providing service.

Is KYC required for BNPL?

Yes, you need to do your KYC before you can use any BNPL or before getting credit limit. In some BNPL, your KYC will be completed only with PAN card, Aadhar card, bank account and mobile number. In the same BNPL you have to give details of your income source and video KYC also has to be done. But KYC is necessary in every BNPL.

Documents required for Pay later

Let us tell you which documents you need to have, so that any Pay Later account can be activated. So you must have your PAN card with you. To activate any Pay Later account, the organization providing Pay Later option finds out the CIBIL score of the user from the user’s PAN card number. The second document you will need to verify your address. To verify the address, you need any one of Voter ID card, Driving license, Aadhaar, Utility Bills, Passport.

How do BNPL late payments affect your CIBIL?

If you do not repay BNPL on time, that is, you make late repayment, then it can badly affect your CIBIL score. Let us tell you how it can affect your CIBIL score. So whenever the credit bureau generates the CIBIL score, it collects the repayment history of the user from different lenders and in such a case the lender who has given you credit limit in pay later, will give a negative review in your repayment history. This way you will have a bad effect on your CIBIL score.

Is pay later apps banned in India?

Are pay later apps banned in India, if this is your question then let us tell you that some pay later apps which were involved in illegal activities have been banned by RBI. But most of the pay later apps which are running under the rules and regulations made by the Government of India, all those pay later apps are not banned at all and even today many Indians use them too.

How to choose the right Pay Later service

How to choose the right Pay Later service? If you also want to use Pay Later service but you are not able to understand which Pay Later service you should use for yourself out of many Pay Later. So we tell you some ways by which you will know which Pay Later service is best for you.

Credit limit: Every Pay Later has a limit of credit limit, more than that it cannot give credit limit. So decide for yourself how much credit limit you want and then decide whether to select a Pay Later service. Like Freecharge pay later gives a credit limit of up to 10000, then the same Postpe gives a credit limit of up to 1000000.

Eligibility: Each Pay Later requires different eligibility, like some Pay Later requires minimum age of 18 years and some require 21 years of age. You can choose any Pay Later application according to your eligibility.

Review: The third point is ours that before selecting any “Buy Now Pay Later” you should read its review. If you are downloading any Buy Now Pay later application from Play Store/App Store, then you must read both its bad and good reviews carefully in the review section. You will also know whether this Buy Now Pay Later app is suitable for you or not.

Is Pay Later the same as a credit card?

If you think that Pay Later is the same as a credit card, then it is not so at all. Pay Later is not a credit card. While both allow deferred payments, Pay Later services typically do not involve a traditional credit check, and they may offer interest-free or low-interest repayment options. Let us tell you that most credit cards charge interest, but most BNPL does not charge any interest.

Are there any fees associated with Pay Later?

Although there is no charge of any kind in BNPL, but in some BNPL some charge has to be paid for activation and in all BNPL if the payment is missed or late payment then late fee has to be paid. Apart from this, there are some services in BNPL for which some charge has to be paid, it depends on the different “Buy Now, Pay Later” provider.

Can I return items I’ve purchased with Pay Later?

If you buy any product or service from “Buy Now Pay Later” but after that thinking of refunding it, do you know whether you can refund or not.Where will the money go if the merchant refunds you? If you have bought a product or service from any platform and want to refund using “Buy Now, Pay Later” then the first thing you should know is whether the merchant/platform will refund or not. If the merchant/platform refunds, the money will automatically be credited to your BNPL account.

Do I need good credit to use Pay Later services?

Yes, only if your credit score is good you will be able to get credit limit from any Pay Later service. If your credit score is bad to some extent then you will get less credit limit and if your credit score is bad at all then you will not get credit limit at all and neither will your Pay Later account be activated. But compared to other types of loans, there is no problem even if the credit score is a little bad in BNPL.

Can I use Pay Later for large purchases?

Every person has a credit limit in his Pay Later account. That person can buy any product or service within that credit limit. That person cannot buy any product using BNPL for an amount exceeding that credit limit. If you have a higher credit limit in your BNPL account, you can make larger purchases, that is, you can buy a higher amount of products. All you have to remember is that you can buy goods of the same amount as per your credit limit using BNPL payment method.

Can I pay off my Pay Later balance early?

Yes, if you want, you can clear the utilized amount of your credit limit soon. By the way, in most Pay Later bills are generated on the 1st of the next month, you can clear your bill even before that.

If you make early repayment, your credit score will also increase, Pay Later limit will also increase and you will not have to pay any kind of late fee.

Can I use Pay Later for subscription services?

Yes, every Pay Later gives its user the option to buy various types of subscription service or clear its bill. Apart from this, you will also get the option of doing many types of recharge easily in every BNPL. If this question is coming in your mind whether you can subscribe to OTT platform or not. So let us tell you that you can also subscribe to OTT platform through Pay Later payment method.

Are Pay Later services regulated?

Yes, Pay Later is regulated in every country like in India all “Buy Now, Pay Later” are regulated by RBI. Similarly, in other countries also, “Buy Now, Pay Later” service is regulated by the financial institutions there. Our country’s RBI keeps issuing its rules and regulations from time to time for “Buy Now, Pay Later”. If any “Buy Now, Pay Later” institution is involved in any illegal activity then it is banned by RBI.

Can I use Pay Later services for business expenses?

After getting information about BNPL (Buy Now, Pay Later), the question arises in the mind of many business people whether they can use BNPL (Buy Now, Pay Later) for their business expenses because this option can help a lot in business.

Let us tell you that most of the BNPL services currently available in India are for personal use. But some BNPL is also for business, but in that you will not get as much service as you get in personal BNPL.

How do Pay Later providers make money?

Is this question coming in your mind that if Pay Later gives an interest free credit limit to the users then how do they earn money. Let us tell you how to earn money through Pay Later.

So the first source of earning their money is the merchant. The website/app on which you pay, the owner of that website/app has to pay some money as a processing fee to pay later. Apart from this, when a user makes a late payment, the late fee is charged and in some conditions, interest is also charged, then in this way, the company providing Pay Later option earns money.

Final thought

Pay Later is a very good option for a person because it is easy to activate and it is also easy to use. Apart from this, there is no interest of any kind in this. By using this, a person can make his life better, but if Pay Later is used without financial knowledge, there can be many problems.

Apart from this, due to this “Buy Now, Pay Later” more expenses start increasing. Well, in this post we have tried to give more information about “Buy Now, Pay Later”. How did you like this post, you can tell us by commenting and if you want to give some information to people in Buy Now, Pay Later, then you can comment.

Previous articleFreecharge Pay Later Activation, Fees, Pros and Cons
Next articleAdvantages and Disadvantages of UPI Transaction