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According to Investopedia, Buy Now, Pay Later (BNPL) is a type of short-term financing that allows consumers to make purchases and pay for them at a future date, often interest-free. Also referred to as “point of sale installment loans,” BNPL arrangements are becoming an increasingly popular payment option, especially when shopping online. Starting a BNPL platform requires understanding the rudiments and requirements that make it a successful venture. Venturing into BNPL is still quite nascent compared to other sectors in the FinTech industry. In this article, I discuss seven must-needed features for BNPL.
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BNPL Is A Quick Installment Payment Service
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For example, BNPL means that if the car costs the sum of 1 Million Naira, the consumer can pay for it in 3 installments of 333,000 Naira each over 3 months.
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BNPL Is Discount-Based
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BNPL Runs Effectively On Spreading Payments
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BNPL Is About Discretionary
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BNPL Works Effectively With Credit Quality Customers.
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The BNPL provider has many costs, if the merchant discount is 3%, the BNPL now has to pay:
- Cost of finance
- Operational costs
- Credit losses
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BNPL Works Well On Loan-For-Product Model
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BNPL Is Frictionless
Final Words
BNPL is a very interesting FinTech service that is highly needed in an emerging market like Nigeria due to several reasons. First, Nigeria is a middle-class economy where people live from paycheck to paycheck, which has made it difficult for them to meet their needs. And people often have to let go of a significant part of their earnings, if not all, to purchase things. Hence, this makes it profitable for BNPL to establish its startups in Nigeria. Featured Image Source: Empower2FreeGot a suggestion? Contact us: editor@connectnigeria.com
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