28 Jul, 2025
4 mins read
With digital payments on the rise, a new credit trend is reshaping consumer spending - Buy Now Pay Later (BNPL). Offering flexibility and convenience, BNPL lets you purchase products instantly and pay for them in instalments. It’s especially popular among young consumers who prefer hassle-free, short-term credit without needing a traditional credit card.
Let’s explore how BNPL works, its benefits, eligibility, and how it compares to credit cards.
Buy Now, Pay Later (BNPL) is a short-term credit facility that allows consumers to make a purchase and pay for it later, either in full after a certain period or in equal monthly instalments. BNPL services are generally interest-free if the repayment is made within the stipulated period.
BNPL is offered by fintech platforms, e-commerce websites, and even banks in India. It acts as a bridge between instant buying and deferred payment.
The BNPL process is simple and usually integrated into online or offline checkouts:
Shop Online or Offline: Select a product on an e-commerce platform or at a partner store.
Choose BNPL at Checkout: Opt for the BNPL option provided by a partner like LazyPay, Simpl, ZestMoney, or Paytm Postpaid.
Instant Approval: Based on your credit profile or KYC, the provider either approves or rejects the transaction instantly.
Repayment: You can repay the amount after 15–30 days, or in 3–12 monthly instalments, depending on the provider and your agreement.
Most BNPL providers do not charge interest if the dues are paid on time within the interest-free period. However, interest or penalties may apply if repayments are delayed.
Eligibility for BNPL in India is relatively lenient compared to traditional credit products:
Basic Eligibility Criteria:
Must be an Indian resident aged 18 or above
Should have a stable income (salaried or self-employed)
A valid PAN and Aadhaar card
Good repayment history or credit score (varies by provider)
Application Process:
Sign up on the BNPL provider’s website or during checkout on a partner platform.
Complete KYC by submitting PAN, Aadhaar, and sometimes bank account details.
The provider sets a credit limit based on your profile.
You can start using the service for shopping and repaying later.
Some providers offer a pre-approved limit, while others adjust it based on your usage and payment behaviour.
BNPL offers a wide range of advantages, especially for tech-savvy and budget-conscious consumers:
Instant Credit: Get quick approval without lengthy paperwork.
Zero Interest (If Paid on Time): Many BNPL schemes charge no interest for timely repayment.
Flexible Repayment Options: Choose between one-time payment or EMI options.
No Credit Card Needed: BNPL works even if you don’t own a credit card.
Improves Financial Access: Easier for people without formal credit history to begin building one.
Here’s a comparison to help you understand how BNPL stacks up against credit cards:
|
Feature |
BNPL |
Credit Card |
|---|---|---|
|
Eligibility |
Easier, even for new-to-credit users |
Requires income proof, strong credit score |
|
Repayment Period |
Usually 15–45 days or EMIs |
Up to 50 days interest-free, with EMI options |
|
Interest Rate |
0% to 30% (if delayed) |
30%–45% per annum on outstanding balances |
|
Credit Limit |
Lower limits (₹5,000–₹50,000 typical) |
Higher limits depending on profile |
|
Acceptance |
Limited to partner merchants |
Accepted widely, online and offline |
|
Hidden Charges |
May include late fees or processing fees |
Annual fees, over-limit fees, etc. |
Buy Now Pay Later is an attractive option for those looking for flexible, short-term credit. It’s fast, easy to use, and suitable for small purchases without the complexities of a credit card. This is reflected in the fact that the Indian BNPL market reached $30.88 billion in 2025, at a CAGR of 20.52%, and is projected to reach $78 billion by 2030.
Used wisely, BNPL can be a valuable tool to manage your finances and cash flow - especially in the growing Indian digital economy.
Buy Now Pay Later meaning: BNPL is a payment option that lets you purchase goods now and pay for them later, either in one shot or through instalments.
BNPL often has simpler eligibility, lower limits, and fewer fees than credit cards, but it is also accepted at fewer places and may offer shorter repayment periods.
Any Indian resident aged 18 or above with a stable income and valid KYC documents may qualify, even without a formal credit history.
Some BNPL services may charge late fees, processing charges, or interest if repayments are delayed, so it's important to read the terms carefully.
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