Buy Now, Pay Later (BNPL) is a financing option that lets the shoppers buy products and pay for them in full or installments later. Some of the most prominent players in this industry are Paytm Postpaid, Amazon Pay Later, Flipkart PayLater and Ola Money Postpaid.
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According to a Reuters report, the booming BNPL industry in India is set to rise more than 10-fold in the next four years. At present, the BNPL market is estimated at $3-3.5 billion, which will rise to $45-50 billion by 2026, Redseer estimates showed. The number of BNPL users in India will also soar to 80-100 million customers by then from 10-15 million now, the research firm said recently.
Even though most BNPL schemes waive off the processing fees for the customers, they levy a penalty for defaults or missed payments. When opting for these schemes, shoppers should, therefore, be aware of the fees and other charges associated with these.
Here’s a look at how Amazon Pay Later and Paytm Postpaid schemes work and the charges linked to them:
Credit limit
Credit limit of both Amazon Pay Later and Paytm Postpaid can go up to Rs 60,000.
Interest cost
Both Paytm Postpaid and Amazon Pay Later offer zero percent interest for a period of up to 30 days for repayment of loans.
Due date
For Paytm Postpaid, the due date for repayment is the 7th day of each calendar month or any other date specified by Clix Finance India - Paytm’s postpaid service provider - in the account statement.
In case of Amazon Pay Later, for any purchase made between the 1st and 15th day of the month, the EMI will be due on the 5th day of the next month. Purchases made from the 16th day onwards till the end of the month will have EMI due on the 5th day of the subsequent month.
Late fees
For Amazon Pay Later, if the customer misses a payment by the deadline, monthly late fees will be applicable on the due amount. For a monthly due of less than Rs 200, there will be no penalty. For an outstanding of Rs 200 to Rs 1,000, Rs 100 will be charged as late fee.
For a due of Rs 1,000 to Rs 5,000, Rs 200 late charge will be levied. Amazon Pay Later will charge a late fee of Rs 350 for monthly dues between Rs 5,000 and Rs 20,000. For any outstanding amount above Rs 20,000, Rs 500 late fee will be charged. A GST of 18 percent will be added to all late fees.
Paytm Postpaid charges late fees based on the outstanding balance per month. If the outstanding balance is up to Rs 100, no late fee is charged. For a balance of Rs 101 to Rs 250, the late fee is Rs 10. If the customer has an outstanding of Rs 251 to Rs 500, Amazon will charge a late fee of Rs 25 per month.
For a balance of Rs 501 to Rs 1,000, the fee is only Rs 50. Late charges go up to Rs 100 for an outstanding of Rs 1,001 to Rs 2,000. Beyond Rs 2,000 to Rs 5,000, the charges are Rs 250 per month. Any outstanding above Rs 5000, will attract a late fee of Rs 500 per month. The late fee charges are inclusive of applicable taxes.
