Akin to a bank card, a Purchase Now, Pay Later (BNPL) card lets shoppers make purchases and pay again over time in a number of installments. Each the choices additionally provide an interest-free reimbursement window. However, what’s the necessity of two completely different merchandise that serve the identical objective? There are key variations within the price and rewards constructions of the 2 financing choices.
BNPL playing cards supplied by Uni and Slice let prospects divide the excellent invoice in three equal interest-free installments over three months. Uni permits its customers to pay a minimal quantity on the finish of the month and carry ahead the remaining stability. “We levy a carry ahead price of 3-4% on the remaining stability from that specific billing cycle when minimal due is paid,” stated Nitin Gupta, founder and CEO, Uni. Bank cards, alternatively, cost an curiosity on the whole remaining stability when minimal dues are paid. Slice doesn’t provide minimal due cost choice.
In pay later playing cards, in case you are unable to pay again the total quantity by the tip of three months, you’ll be able to convert the due quantity in equated month-to-month installments (EMIs) for an extended interval. Gupta stated they don’t cost curiosity per se, however have late charges on default. “For the sake of rationalization, the implied curiosity can vary from 16%-40% each year relying on the due quantity and the person’s reimbursement behaviour,” he stated. Rate of interest charged by bank cards on excellent stability is among the many highest throughout mortgage classes at 36-42% annualised.
As for rewards, most bank cards provide rewards on every transaction that preserve getting collected and might be redeemed within the type of air miles, present vouchers, lodge bookings, and so on., after a sure variety of factors are collected. Uni affords a flat 1% cashback if the full quantity due is paid again by the tip of the primary month. Slice’s cashback scheme works within the type of ‘monies’. With every transaction, the person will get the equal variety of monies as the cash spent. The collected monies might be transformed to cashback with the speed of conversion being 1%, 1.5% and a couple of% for monies stability as much as 3 lakh monies, between 3 lakh and 5 lakh monies and over 5 lakh monies, respectively. For instance, if a person has 1.5 lakh slice monies, they are going to convert this into ₹1,500 cashback (1% of 1.5 lakh).
In different smaller variations, bank cards can be utilized for transactions when you’re abroad, which paylater playing cards don’t permit. Nonetheless, paylater playing cards can be utilized to make sure worldwide transactions from India. Additional, BNPL playing cards give first-time customers a decrease credit score line starting from ₹2,000, which will increase extra time as per utilization and cost behaviour, whereas credit score restrict on bank cards usually begins from ₹20,000.
Supply: Live Mint