Online shopping is the most preferred mode of shopping for almost anything nowadays. From groceries to appliances and clothes from high fashion brands. Every single thing can be brought online. However, catalog shopping has always had its perks. There is a significant amount of people who still like to flip through catalogs before they buy something in-store or online. so choose and charge/Instant credit catalogs- Buy now, pay later.
The biggest allure of this catalog shopping would be its Buy Now, Pay Later option.
What is BNPL?
Buy now, pay later (BNPL) is a financing avenue that allows shoppers to buy something but pay for it later within a stipulated interest-free period in three or more installments. The BNPL provider settles the bill outright with the merchant on the buyer’s behalf. (The Economic Times)
Today, BNPL drives more than just food delivery and e-commerce. It is ubiquitous in the worlds of travel, fashion, education, insurance, and anything else that accepts digital payments.
The BNPL market is estimated to grow from US$ 49296.0 million in 2021 to reach US$ 443781.4 million by 2028.
How is BNPL a factor contributing to the world of catalog shopping?
Imagine someone saying the words “Hey these are a beautiful pair of Jimmy Choo heels. You can take them now and pay later.”
I believe that is a dream come true for so many people.
The Instant credit option or BNPL has led to a huge growth in such purchases. People can instantly and impulsively buy them nowadays.
It is a quick process, with a few potential drawbacks which should be considered before just hitting the “choose and charge” option in such catalogs.
Which Companies do provide this option?
As we all know, before purchasing anything we go on the product site, read all the details available and when it does meet our requirements, we proceed with the payment. Boscov’s, K. Jordan, Wayfair, Ginny’s, Country door, Pottery Barn, Williams-Sonoma, Figi’s, Fingerhut, etc., are a few of the companies that allow this option. Every brand has its different APRs and credit requirements. A person with bad credit may be allowed a lower limit if approved.
Apps like PayPal, Amazon Pay Later, Klarna, Affirm, Afterpay, Futurepay, etc., also allow this option. For example, if we purchase a refrigerator on Amazon, we can purchase it by choosing one of these apps as the payment option. The provider will be charged at that moment.
Eligibility to use BNPL as an option while shopping in India:
- The individual should be over 18 years of age or older.
- The individual should be an authorized holder of an eligible debit or credit card
- Valid government IDs
- Must be a salaried individual.
How to Apply:
After you choose a product, at checkout choose the particular brand’s credit option. For example, if you are shopping from the Country Door, you would have to select the option ‘Country Door Credit’ as a payment method at the checkout. You will have to fill out a short application and submit the order. Then you have to wait for it to be approved (usually within 24 hours). All credit orders are subject to approval.
Conclusion
The choose and charge catalog/ instant credit option can act as a double-edged sword. It fosters a few risk factors for both the consumers and businesses. If one makes way too many impulsive purchases then, he/she/they might run the risk of debt. So if done carefully one can afford and have their desired things with ease and comfort. (provided they keep a good credit score)
FAQs
- Has the pandemic played a role in the increase of Instant credit/BNPL options?
Answer: Of course. Due to the global pandemic, almost all kinds of purchases started to happen online. While people were limited from going out too much, a variety of online courses, utility payments, emergency medical supplies, and entertainment mediums began to occur online. Such circumstances boosted online transactions. Hence, boosting the BNPL services.
- How much have businesses benefitted from this option?
Answer: High-end Brands, merchants, and different businesses have benefitted quite a lot due to this option. The consumers who would otherwise not bother to buy from such merchants due to affordability and availability issues could now afford such things with a flexible model of payment which boosted the sales.
- What are the contributions of the GenZ and Millennial consumers?
Answer: The current generation has a comparatively lower purchasing power but an incessant need to own a lot of things that are trendy. Brands made the best of it. They came up with the ‘fast fashion’ concept and hence caught the eye of the consumers. The consumers who did have a lower purchasing limit could now afford such things with the instant credit option and convenient repayment plans. The older generation also couldn’t escape the allure of the BNPL scheme.
