You can increasingly see slogans on advertising banners – Buy now, pay later! This is a new trend in online sales that is very popular with virtually every group of shoppers.
Using it, consumers can afford to purchase more things and plan their spending further in advance. What is worth knowing about this payment method and the development of the trend itself? You will find out from us!
What is deferred payment based on?
It may seem unbelievable, but more than half of the orders made online do not end with the transfer of the amount due by the customer, but by the bank or other financing entity. This happens precisely because of the deferred payment option, advertised as “Buy now, pay later!”.
Most often, by making a small up-front payment or no payment at all, you can purchase the product. Payment of the entire amount due is then deferred for 14 or 30 days. However, offers that allow the customer to defer payment for up to several months are becoming more common. This option is another, after cash on delivery, pre-delivery or installment billing, which are very popular.
Fintech in the context of deferred payment – what is it?
Fintech is an acronym derived from the English language – Financial Technology. The term refers to companies operating in the online financial industry. They develop useful tools in money management, for example, budget planning applications.
Fintech also offers consumers various debt options, including just deferred payments. One such platform is Kreditech Group, which supports options such as “Buy now, pay later” for people using PayPal.
How does one use the “Buy now, pay later” option?
The way it works is that the consumer orders the product, and the store gets paid right away. In doing so, the customer agrees to pay the amount due by a set date, such as 30 or 14 days.
The whole transaction goes quickly due to the fact that the fintech cooperating with PayU, for example, in this case Kreditech, uses specially developed algorithms to assess credit risk.
Is “Buy now, pay later” really a favorable option?
Deferred payment in most cases is not just a postponement of the transaction. The customer has to pay more than the standard payment would have been. Additional costs arise when the consumer wants to use this option. This is about 10 zlotys. Fintech also charges interest on a different basis, for example, a few percent for each week of deferred payment. Here the question arises whether it is then worth using this form of payment.
At first glance, deferred payment has no disadvantages. After all, in a month, two or even more time we will surely find the means to pay for the purchased goods. In reality, fintechs charge a percentage of the time for which we “procrastinate” to complete the transaction. As a result, in the end you have to pay more than with immediate payment.
Deferred payment will be a good solution when someone absolutely needs a particular product for now and knows that he or she is able to pay the amount due soon after acquiring the goods. Otherwise, it’s a good idea to simply wait, put the money aside and pay for everything right away. That way the fee will be less.
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