BNPL is usually repaid over three installments, and interest plus penalty kicks in if the consumer cannot repay an installment on time.
Zomato is all set to apply the Buy Now Pay Later (BNPL), which is gaining popularity on online shopping platforms. Buy Now, Pay Later (BNPL) allows consumers to make purchases and pay for them at a future date, often interest-free for a stipulated time.
It’s usually repaid over three installments, and interest plus penalty kicks in if the consumer cannot repay an installment on time. BNPL has gained immense popularity, especially among young shoppers who usually seek instant gratification.
“Zomato is of the view that why should a consumer be going to a third party to avail BNPL to buy food or dine in at a restaurant. So, this will help Zomato keep its consumers captive on the platform,” quotes ET Now.
Fintech startups such as PayU, EPaylater, and Simpl offer credit to customers who order food online. Several large-sized banks are also approaching the ‘buy-now-pay-later fintech firms to expand their credit base.
If Zomato goes live with BNPL, it will be interesting to see how its competitor, Swiggy responds to it. The stock market’s reaction to such a move is also worth looking out for. Zomato recently informed the stock exchanges that it would be setting up its own NBFC (non-banking financial company).
That had been the first hint of Zomato’s fintech ambitions in recent times. Till Zomato gets all the requisite approvals to set up a NBFC, it might end up entering contracts with other NBFCs to go live with BNPL.
Options to delay payment
Companies like PayU, Simpl, and ePayLater offer credit on food ordering apps and restaurants like Swiggy, Zomato, FreshMenu, Faasos, etc. The food delivery companies and restaurants that have tie-ups with these fintech startups provide the pay later.
If you want to order food online, the companies will allow you to order without paying money immediately. Till Zomato gets all the requisite approvals to set up a NBFC (non-banking financial company), it might end up entering contracts with other NBFCs to go live with BNPL.
Impact of delaying to pay for food
Most financial institutions cater to the convenience of customers. Paying later for food seems convenient. Before availing of this option, it is essential to check the charges, impact of BNPL on credit history, and privacy. Interest will be applied if the money isn’t repaid on time; a penalty may also apply in some cases.
Any kind of default can harm your credit score. The impact of a negative score is that it can damage your future loan capability and many other credit options. Therefore, it is vital to be well-read and informed before availing of these services.
Published By – Vanshu Mehra
Edited By – Subbuthai Padma
