BUY NOW, PAY LATER

Easy credit can be convenient, but it can also cause harm, if done without understanding the flip side and associated costs when availing it

- Narayan Krishnamurthy

Digital transformation and adoption witnessed tremendous growth in the past two years and has changed consumer behaviour tremendously. “Sitting at home, I had access to anything that was digitally available. I started experimenting with a few things, but since August 2020, all my purchases have been online,” says 25-year-old Ahmedabad-based Divya Shah. She is among the many people who have quickly adopted digital, not just for work and entertainment, but also for day-to-day household needs.

Other than convenience, she uses the digital gateway to her advantage with the ‘buy-now-pay-later’ (BNPL) interest-free option that is available for several online spends. BNPL allows consumers to buy a product or service without worrying about making an immediate payment. The repayment can be either in full or in the form of the very popular EMI (equated monthly instalment) mode.

In Bengaluru, 41-year old Venkatesh Chari, a software engineer with a leading IT company is all praise for BNPL. “Over the years, my life has been running on EMIs and this is one more way of managing cash flows that were hit by Covid,” he says. Chari faced some tough months in 2021, when his already-reduced salary started coming in late, impacting his cash flow. “My existing loans left little room to spend and I tried BNPL for regular household goods that bought me time,” he explains. Chari has been tightly juggling his finances with a home loan, personal loan and car loan that account for a major chunk of his salary each month.

EASE OF CREDIT