Launch your own buy now pay later product with Decentro in weeks.

How to Launch a BNPL Product For Your Business In 3,2,1

What is Buy Now Pay Later? How can you set up a BNPL product for your business in a few weeks?

As a business owner, have you been worried about seeing low customer checkouts? Where some users are on the brink before they abandon the cart and bounce off your platform? 

There must be umpteen measures you’ve set in place to combat these issues. A better user experience, diversifying your product catalog, gift cards & coupons, upselling & cross-selling. In addition, adding new payment methods, like UPI payments, to make checkout convenient. Have you considered offering a credit-like option as well?

Buy Now Pay Later, to be precise. 

A simple feature that eliminates purchase hesitation and encourages users to pay at a go. Here we have taken the simple example of an e-commerce business owner. Similarly, any platform can offer the BNPL service to its customers, partners, or merchants to establish a smooth money flow. 

Is BNPL a fad?

India is expected to be one of the fastest-growing countries to embrace the adoption of BNPL & digital payments. Thanks to its demographic potential & youth population(about 64% of the population constitutes young adults), making us one of the youngest countries in 2020.

Let’s see some more numbers, shall we?

Source: Research and Markets

According to the Q4 2020 BNPL Survey, in 2021, BNPL payment in India is estimated to grow by 71.7% on an annual basis to reach US$ 3.8 Billion!

Today, let’s understand how buy now pay later contributes to this massive growth and revolutionizes credit. 

What Is Buy Now Pay Later?

BNPL is a financial arrangement that seems strikingly similar to the credit system. A mechanism that aims to reduce the friction for customer payments & checkouts. 

Buy Now Pay Later is a financial offering that helps consumers purchase a product without paying the amount upfront. This arrangement offers an extended period for repayment that makes purchase decisions easier for customers and lowers their hesitation significantly. 

In most cases, buy now pay later offers zero interest on the credit that it provides, and the payments can happen in installments, similar to EMI, or at one go before the date. 

Many platforms offer BNPL services to businesses, and they source their income through a fee on the transactions from the business owner/merchant. In addition, traditional banks such as ICICI Bank & HDFC also offer the buy now pay later feature to customers. For instance, HDFC Bank’s Flexipay provides zero-interest credit for 15 days with a credit limit of ₹60,000.

How Does BNPL Work?

Let’s take a typical example of how the buy now pay later system works. 

A business owner or merchant integrates with a BNPL provider to offer credit-based payments for their customers. The BNPL entity runs e-KYC checks on the customer and background credit checks before extending the service. In essence, the customer’s creditworthiness is evaluated with income checks, negative lists, behavioral checks via KYC for the same. The larger the credit score, the better are the chances of clearing this! 

A workflow showing how buy now pay later works.
How BNPL Works

The customer pays a small amount in advance in some cases, and the purchase is successfully completed. In due course, the BNPL provider receives the payment from the customer, and later settles the funds with the merchant. There is an interchange commission the platform earns from the merchant with each transaction.

 Buy Now Pay Later Vs. Credit Cards

At one glance, buy now pay later seems to work just like a credit card. However, there are some differences between the two. 

BNPL arrangements often don’t charge an interest fee on the amount and come with a fixed repayment period- this could be weeks or months. Furthermore, in most cases, the payment is the same as the purchase amount.

On the contrary, when you use a credit card, there’s an option to make only the minimum payment due on the repayment cycle. The interest adds up until the payment is complete for the amount that’s pending unless your card has a 0% introductory APR. 

A graphical representation that shows buy now pay later growth driven by people who don't prefer credit cards.
Source: AmericanBanker

A survey by The Ascent showed that about 62% of users think BNPL will rule over credit cards and replace them in the future. 

In India, getting access to a traditional credit card is cumbersome. 

  • Quite commonly, the user may not have sufficient credit history or score to make the cut. 
  • The consumer section is yet to switch to credit methods for their everyday payments. They usually reserve this for large-sum purchases. 
  • The interest that credit cards levy on the users tends to refrain customers from using these. 

Buy now pay later overcomes the traditional barriers a credit card puts up. Let’s see how! 

What are the Benefits of BNPL?

Let’s look at the advantages of buy now pay later from two different angles. One from a customer’s point of view and another that of a business owner’s.

Buy Now Pay Later For Customers

  • From the POV of a customer, BNPL offers the ability to make instant purchases, even if they lack funds at the moment. 
  • The ability to make payments in installments over time or pay the full amount by the end of a stipulated period. 
  • The system is completely free for users who pay on time. Credit cards allow you the option to pay a minimum value and charges an interest on the rest. On the other hand, BNPL only charges for late payments. 
  • It is much easier to get credit via BNPL as compared to traditional lending methods. 
  • Contrary to credit cards, BNPL gives customers instant access to funds without waiting for months together with quick approvals. 

Buy Now Pay Later For Businesses 

  • Enables a merchant to increase the customer checkouts rates and reduce payment abandonment cases. 
  • Boost the overall sales with diverse payment options and increasing the average order value or AOV. 
  • In addition, business owners can also open an additional revenue stream using the loan interest. 
  • Merchants pay an interchange fee to BNPL companies, around 2-7%. However, this is significantly lesser compared to credit card providers’ fees. 

Launch Your BNPL Product With Decentro

E-commerce giants such as Amazon & Flipkart have their native BNPL products offered to customers.

What if we tell you that your business can launch your own buy now pay later product in a matter of weeks, without depending on any service providers, similarly? 

With Decentro’s lending stack, you can consume plug-and-play banking APIs to build and launch your BNPL product within weeks. 

A workflow showing the lending stack of Decentro that powers-up buy now pay later.
Decentro’s Lending Stack

Let’s take a look at how you can set up a buy now pay later workflow for your business. 

Provide Credit to Customers After KYC

With our all-in-one KYC APIs, you can run comprehensive background checks on your customers before deeming them eligible for credit. These checks include identity verification via Aadhaar, PAN, CIN, DIN, income data, behavioral data, negative lists, etc. 

An infographic on how a business can run background checks on customers using Decentro's KYC APIs.
Decentro’s All-in-one KYC APIs

In addition, with our CKYC APIs, you can prefill the onboarding information for customers in the future, save time, and reduce the instances of fraud drastically. 

Set BNPL Repayment Terms 

Set the optimum credit limits and assign repayment terms to your customers. Using Decentro, you can seamlessly integrate with credit bureaus to assess the customer’s creditworthiness and decide the criteria. 

Simplify Payment Collections

If you thought collecting the payments from customers after the stipulated period is a headache, we can help. Simplify collections by using diverse channels to reach out to your customers. For instance, UPI Payments fully equipped with deep linking from your app. 

Save 5x collection costs and get real-time updates of transaction details on a dedicated dashboard. You can also enable autopay debit with due consent from your customer. Consequently, set the amount(variable or fixed), the frequency, and ensure seamless payments. In addition, you can pause and revoke the mandate at any time. Furthermore, you can shed all worries of payment reconciliations- our virtual accounts will take care of that bit, and in real-time.

The Lending ecosystem in India is only going to expand in the years to come. With more players opting for the buy now pay later options, the importance of lending in the economy is evident. 

Ergo, the possibilities with credit are endless; and we want to help you realize the true potential without spending any interchange commission or waiting for months together. Signup, choose your APIs, test in the sandbox, and go live!

While your competitors are waiting around for integrations and paying a hefty fee to service providers, here’s a smart way for your business to supersede it! We’re just a chat away at

P.S. Stay tuned; in our next blog on pay now pay later, you can crunch on some business numbers related to BNPL.