The advent of technological advancement has lifted the Indian economy to a more smartphone-friendly affordable platform for the modern and adaptive generation of people.
Thousands of startups businesses are launching their unique ideas into the market only because of the ease in the retail sector. E-commerce businesses have become the epitome of the fast-growing Indian market.
India has a broad platform for small and big merchants serviceable to over 750+ million smartphone populations. All of it is possible only because of the payment methods that are both user and seller-friendly.
With the aid of the Buy Now Pay Later (BNPL) system, there is an absolute advantage for local merchants running small businesses across the country. India’s economic or buying-selling system runs deep with the values and sentiments of the buyer.
BNPL has empowered the local merchants with the invention of the micro-credit system, a straightforward form of payment that works based on microtransactions on a timely basis.
Understanding BNPL System
Indian consumers are always in search of a comfortable financing system. The lengthy processes or the time banks take to approve small-funding personal loans can be daunting. Keeping the lifestyle changes and consumer needs in everyday life in check, ‘Buy Now, Pay Later (BNPL) came into action.
The short-term financing system allows consumers to pay later in the stipulated time for any purchases. The BNPL method has proved convenient for people who are not willing to pay higher interest rates on credit cards. No-cost or low-cost EMIs offered by the many BNPL online merchants is a transparent and accessible procedure.
Working of BNPL System
The idea of the shop now paying later shares authenticity regarding users’ verification and other conditions such as their identity. BNPL process is simple and is as follows:
- Sign-up with the basic verification process
- Pass through the KYC authentication. i.e., proof of Aadhar card and PAN card.
- The merchant will check for your CIBIL score
- Select a participating retailer and make a purchase
- Opt for the ‘Buy now, pay later option
- The amount splits in the form of interest-free EMIs
India has a robust chain of online merchants with different BNPL policies for its audience. They tie up with famous brands in various industries such as food, clothing, travel, etc. The BNPL merchants offer services. It is easy to understand the consumer’s relationship with the BNPL merchant; however, many benefits of BNPL empower local merchants in both small and large scale industries.
Advantage of BNPL to Local Merchants
Retailers in India are one of the most potent keys to the Indian economy. They set an example to improve the visibility of local merchants in the technology era. BNPL has become the bandwagon of cashless technology.
As most businesses run on monetary trust, it is essential to value and win a local merchant’s trust. The BNPL service providers must create benefits for the local merchant or owner. Reduced costs or revenue increases are the only two ways local merchants will take the risk of BNPL. In such cases, you may wonder how the merchants benefited from BNPL?
The BNPL program laid to local merchants in the faith of good returns in business. Retailers across India imply the Buy Now Pay Later system into their revenue making to receive consumers who can purchase high-value goods, eventually making the selling data scale up.
Local merchants with low-value goods can take the opportunity to increase conversions to reach new customers. Overall, the increased sales value becomes advantageous for the local merchant’s business.
The Win-Win Situation
We can understand BNPL tactics widely as a form of business psychology that benefits both the consumer and the merchant by achieving a win-win situation. For example, consumers who avoided high budget products can now afford the BNPL plans, thus giving the local merchants the sale benefits.
The seamless nature of BNPL may be customer-centric, but it has groundbreaking profitable exposure to the local merchants. In India, over 51% of multi-brand retailers bear most of the economy.
However, even though the local merchants benefit from BNPL, it solely depends on the retailers on how they share customer relationships with the Buy Now Pay Later provider. Local merchants are empowered to run a full-fledged business without going through debts that can sink the company in no time.
BNPL Future Ahead
There is no doubt that the BNPL is the future face of the eCommerce sector. A cashless and effortless system is a long-term road that can directly interrogate, balance or affect the nature of business,
From traditional to modern retailers of over 12.8 million can increase provide and the economy in jet speed. BNPL is becoming ubiquitous in youngsters’ lives, and so is the empowerment of local merchants.