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Visa and Mastercard will launch Buy Now Pay Later platform, know what is this payment system; how does it work

Visa and Mastercard will launch their Buy Now Pay Later Platform (BNPL) in India by the end of FY 2022.

What is Buy Now Pay Later (BNPL): Global card networks Visa and Mastercard will launch their Buy Now Pay Later Platform (BNPL) in India by the end of FY 2022. This information has been received from the report of Economic Times. According to an ET report, Visa and Mastercard are in talks with partners to create a platform that allows retail brands and online sellers to directly enter into agreements with banks and offer customers multiple payment options.

Liaison with big banks

The chief executive, who works in a large private bank, told ET that work is underway on the BNPL platforms of both Visa and Mastercard. And this is true because they have big data of customers, through which they can develop platforms for banks and work in this area with ease. According to the report, both Visa and Mastercard have approached the major card issuing banks in this matter. Visa is also in talks with one or more payment platforms for the agreement in this regard. However, both of them have not given any reaction in this matter yet.

At present, some startups are providing this service. These include ZestMoney, Capital Float, PayU’s Lazypay as well as Pine Labs and Paytm. This market has seen increased attraction during the last two years. The reason for this has also been that during the pandemic, crores of people have opted for online shopping.

What is Buy Now Pay Later (BNPL) payment?

It is a payment option, in which you can make purchases without paying out of your pocket. Generally, you need to sign up with the company that provides this feature when you make a purchase. However, once the lender makes the payment on your behalf, you will have to repay it within a stipulated time period. You can pay it as a lump sum amount or can also pay through no-cost EMI. If you are not able to make the payment within the stipulated period, the lender may charge interest on your amount. Delaying beyond this will have a very bad effect on your credit score.

How does BNPL work?

The working style of BNPL service providers is similar. There can only be difference of terms and conditions.

  1. Pay with a retailer.
  2. Select the Buy Now Pay Later option.
  3. Make a small down payment of the total amount.
  4. Some of the remaining amount will be deducted in the interest free EMI.

Note: EMI can be paid by bank transfer, cheque, credit card, debit card or directly through the bank account.

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Shehnaz Ali
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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