THE DIFFERENCE BETWEEN BNPL AND CREDIT CARD PAYMENT
Feb 02, 2022 - 6 MINS READ
KNOW THE DIFFERENCE BETWEEN BNPL AND CREDIT CARD PAYMENT
Introduction to BNPL Provider
BNPL or Buy Now Pay Later, is a payment option that allows you to make a transaction without having to pay out of your own cash. In most cases, you join up with an organization such as ULIS FinTech that offers this service with a Simple and Transparent Process.
Companies that use BNPL services have an extra payment option at the time of checkout. When the checkout process is over, the BNPL provider pays the merchant in full. After then, the consumer repays the supplier in a series of payments.
Some BNPL services have a set number of payments, while others enable the consumer to select their own instalment plan. To increase company outcomes, offer clients the option to buy now and pay later in instalments with customizable interest rates via BNPL.
The BNPL service is operational style, with terms and conditions serving as the primary differentiator. This is how it normally goes:
- Purchase anything from a partner merchant of BNPL service provider.
- Select the "Buy now, pay later" option.
- Make a little down payment on the whole purchase price.
- The balance will be deducted in a series of interest-free EMIs.
Difference in features of Credit card and BNPL
On the checkout page of E-commerce enterprises, BNPL offers Instant Access to Credit, whereas applying for a credit card is a time-consuming procedure. As a result, BNPL is far more accessible than a credit card. It is quite beneficial to anyone who wishes to expand their business. It entails no credit check, debt conversation, income evaluation, and much more. The simplicity of the application might also be a significant advantage since you have more spending flexibility.
- Instant Access to Funds
BNPL provides you with immediate access to money whether your business is online or in-store. When you apply for a new credit card, on the other hand, you have to wait weeks for it to arrive before you can use it. As a result, checking out with a Buy Now Pay Later payment option is a straightforward and transparent process. It also increases affordability and is beneficial for E-commerce enterprises
- Repayment Procedure
The Buy Now Pay Later payment option allows consumers to stretch the cost of their purchase from any E-commerce enterprise. It allows clients to buy now and pay later in instalments with adjustable interest costs to increase company outcomes. Credit cards, to some extent, often provide interest-free periods on purchases that coincide with the Buy Now Pay Later repayment window. In addition, unlike BNPL, you are not required to make instalment payments throughout the interest-free period.
- Credit Limit
When you apply for a credit card, you are given a credit limit. BNPL, on the other hand, reduced cart abandonment, higher AOV and transaction size, and increased revenues are all advantages for your company. Credit cards limit purchasing power since they supply limited money availability; however BNPL does not have a limit, so they can keep spending and then let their BNPL customer decide.
Credit cards are subject to severe qualifying conditions, which include income verification, a minimum income requirement, a strong credit score and credit history, and so on. Your credit card registration will be refused if you do not meet the eligibility standards. Buy Now, Pay Later programmes, on the other hand, do not have such stringent requirements. In truth, if you use the BNPL programmes offered, the procedure is quick and simple. As previously said, all you have to do is register for free and submit the necessary basic information at the time of checkout, and your line of credit will be ready to use. As a result, BNPL is becoming increasingly popular among businesses that do not have access to credit cards.
BNPL is a payment method that allows you to complete a transaction without using your own money. Some BNPL services need a defined number of payments, but others allow the user to choose their own instalment plan. The Buy Now, Pay Later payment option allows customers to spread the cost of their purchase from any E-commerce company. It enables customers to purchase now and pay later in instalments with flexible interest rates. BNPL is growing in popularity among firms that do not have access to credit cards.
You can learn more about ULIS Fintech BNPL services and other services by visiting www.ulisfintech.com, where you can receive an overview of different types of services like E-wallets, Digital Onboarding, Cash-back Managements, Mobile Money Wallets, and so on.