There is no denying that how the COVID-19 pandemic has introduced a paradigm shift in the landscape of digital payments in India. In simple words, the online retail business adoption is at an all-time high nowadays. Have you ever observed your shopping cart getting a bit too full and you have to delete a few items to stay compliant with your budget? With Buy Now Pay Later (BNPL), you can now order your items easily. In simple words, BNPL refers to a short-term refinancing for the ecommerce era. It is a type of personal loan issued at the point-of-sale.
Moreover, BNPL is an innovative way with the help of which the organizations can leverage the data-driven strategies to unlock their true potential.
With the rise of digital payments, companies are now deploying BNPL to stay relevant amidst the increasing competition. Quite interestingly, some of the banks have also forayed into the realm of BNPL.
In case you don’t know, BNPL is a short-term micro-credit model where consumers have to pay little or no interest rates for online purchases through the ecommerce platforms. Note that this installment-based payment option is not entirely a new concept. Moreover, Buy Now Pay Later offers companies with a seamless installment experience without the unpredictability associated with credit cards.
For users, BNPL has emerged as one of the best options to indulge in online shopping. With the ever-evolving digital payment structures, there is no doubt that BNPL would receive huge popularity in the future.
With the ecommerce landscape all set to become competitive, the offerings from BNPL will evolve to be more sophisticated as merchants will want to differentiate their brand from others. So how good BNPL is? Here are some ways in which BNPL will change the face of the ecommerce industry.
BNPL’s popularity is mainly due to AI
Do you know that the primary reason behind the popularity of BNPL is due to the advent of AI? This model has become popular because of the technological innovation emanating from AI. Note that short-term loans in the realm of ecommerce are not a new thing.
Moreover, stores and restaurants have tried to augment sales by permitting customers to open tabs. In this context, it is important to note that the ecommerce companies are finding ways to offer credit to the customers. Recently, BNPL has garnered popularity because of the onset of the COVID-19 pandemic.
Results in Better Onboarding of Customers
Note that in the legacy credit system, the issuance of short-term loans depended on the ability of users to prove good credit. This is usually accomplished by checking the credit scores of the customers. This usually sounds straightforward for many. However, it has its fair share of issues too. For instance, the user may possess a low score to be issued a loan.
On the other hand, frequent checks can negatively affect the credit scores of the users. Customers with bad credit may not be willing to allow merchants to analyze their scores because of privacy concerns. However, with BNPL, your company can address these issues. Note that the BNPL payment plans are designed in such a manner that they bypass the credit checks.
If you want to buy an item via BNPL, there is no need for you to apply for a loan from the ecommerce platform. Instead the BNPL provider provides you with credit. And as BNPL leverages AI, it can empower and gather customer data to implement sophisticated decisions.
If you want to make a purchase via BNPL, the provider may prompt them to answer a few questions. In most cases, users looking forward to leverage Buy Now Pay Later have to showcase and verify their IDs. BNPL can collect data of customers and term them as high-risk individuals and low-risk individuals.
Prevention of Fraud
The early recognition and prevention of fraud has long been one of the primary applications of AI. For BNPL service providers, AI provides innumerable advantages. It is AI which verifies the real identity of the buyers. Moreover, natural language processing also plays a key role in verifying the personal documents of the borrowers. BNPL also applies predictive algorithms to flag users who are serious defaulters. In this manner, BNPL helps to protect a company from fraud. There is no denying the fact that the BNPL technology is creating a huge effect on the ecommerce industries.
In this digitally connected world, both AI and BNPL are changing the business operations of the companies. MultiQoS is a reputed ecommerce website development company in USA. You can contact them to integrate BNPL in your online payments platform. They have great expertise in designing ecommerce solutions for a large number of companies. Contact them today and see how they will help you design the best BNPL platform.