Why Your Business Should Offer Cardless EMIs And Pay Later Payment Modes

In today’s fast-paced digital landscape, customer convenience and flexibility are paramount to success. With traditional payment methods still evolving, businesses must adapt and provide innovative solutions.

Cardless EMIs and pay-later payment modes are revolutionizing how customers shop and pay for products and services. This blog will explore the numerous benefits of these payment options, from attracting new customers and increasing sales to enhancing customer loyalty.

Keep reading the blog to understand why incorporating cardless EMIs and pay-later options can give your business a competitive edge in this dynamic marketplace.

What Is The BNPL Method Of Payment?

BNPL is an acronym for “Buy Now, Pay Later.” It is a payment option that lets customers make quick purchases and pay for them later, usually in instalments.

This pay-later technique has become popular as it provides immediate gratification without the stress of upfront payments. It allows customers to enjoy their products immediately while also providing the convenience of deferred payment choices.

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Here Are The PROs And CONs Of The BNPL Method

Pros of BNPL method

Cons of BNPL method

– Allows customers to spread out their payments over a period of time. – Simplifies the checkout process by eliminating the need for credit card information, allowing faster transactions. – Customers with minimal or no credit history are frequently eligible, making it a feasible alternative for a broader spectrum of consumers. – Customers with minimal or no credit history are frequently eligible, making it a feasible alternative for a broader spectrum of consumers. – Provides interest-free periods to customers, allowing them to make purchases without incurring additional fees.

– If not handled carefully, BNPL might result in debt accumulation. – Some BNPL services impose late fees or interest if payments are not made on time. – Delayed or missed payments can harm a customer’s credit score, limiting future borrowing opportunities.

What Is Cardless EMI?

Another popular payment method that allows customers to make high-value purchases and pay for them in EMIs is cardless EMI. A cardless EMI is not connected to a card. Although one can choose to pay with a card, the term “cardless” implies that the EMI is not connected to the customer’s debit or credit card.

Cardless EMIs, in contrast to BNPL, provide clients with higher credit limits, enabling firms to increase their average order value.

Here Are The PROs And CONs Of The Cardless EMI Method

Pros of Cardless EMI method	Cons of cardless EMI method
Cardless EMI opens up purchasing options to customers who may not possess a credit card or prefer not to use one.	Cardless EMI plans frequently include interest charges, which can raise the total cost of the purchase.
It provides a smooth payment experience by eliminating the need to carry physical cards or remember card details.	Customers must be cautious about accumulating too much debt by using multiple cardless EMI options simultaneously.
Allows customers to break their payments into affordable instalments.	All merchants or enterprises do not accept cardless EMI.

The Difference Between The Two

Though both cardless EMI and BNPL sound the same, they have a few differences between them.

Buy Now, Pay Later (BNPL)	Cardless EMI
Purchase now, and pay the full amount at a later date	Purchase now, pay in fixed monthly instalments
Ideal for low-value credits	Suitable for individuals with high credit limits
Targets young consumers and students without credit card eligibility	Focuses on expanding into tier-2 and tier-3 cities through mobile app accessibility
Repayment options may or may not include EMIs	The repayment structure typically follows an EMI model
EMIs may have charges, but some lenders offer zero-cost EMIs	Often available at 0% interest, with a few exceptions.

The RBI’s Stance On The BNPL Method

In India, the Reserve Bank of India (RBI) has not banned BNPL (Buy Now, Pay Later). However, the RBI issued a notification in June 2022 that imposed significant limits on the BNPL sector.

These Limitations Include

• Non-banking institutions (NBFIs) cannot use credit lines to load prepaid instruments (such as digital wallets).
• Before providing BNPL services, NBFIs must do extensive due diligence on their consumers.
• NBFIs are expected to implement effective risk management systems.

These restrictions are intended to protect consumers from the dangers of BNPL, such as overspending and debt. They have, however, hindered the growth of the BNPL sector in India.

Despite the limitations, BNPL is a popular payment method in India. By 2026, this market is estimated to reach $10 billion.

As the BNPL market in India grows, the RBI will likely regulate the sector further. This will make BNPL a secure and responsible payment option for consumers.

Why Should Businesses Enable BNPL And Cardless EMI?

Enabling Buy Now, Pay Later (BNPL) and Cardless EMI options for businesses offers numerous advantages that can significantly benefit both the business and its customers.

Here are compelling reasons why businesses should consider enabling BNPL and Cardless EMI:

1. Increased Sales

By making products and services more affordable, BNPL and Cardless EMI options attract a broader customer base. Providing flexible payment solutions can help businesses convert customers who would otherwise delay or abandon their purchase.

2. Enhanced Customer Experience

Customers appreciate the flexibility of payment terms that match their financial situation, increasing customer loyalty and satisfaction.

3. Competitive Edge

A business with BNPL and Cardless EMI options stands out from its competitors. In addition to attracting and retaining customers, it demonstrates a forward-thinking approach that adapts to changing customer preferences.

4. Increased Average Order Value

By reducing the upfront payment barrier, BNPL and Cardless EMI enable clients to make larger purchases. This can result in higher average order values and revenue for the company.

5. Partnerships And Marketing Opportunities

Enabling BNPL and Cardless EMI might lead to collaborations with payment providers and platforms that provide such services. These collaborations can provide exposure and marketing opportunities, boosting the company’s reach and visibility.

6. Financial Stability

Businesses can guarantee reliable payment processing and limit the risk of late or defaulted payments by collaborating with trustworthy BNPL and Cardless EMI providers. This contributes to the company’s financial stability and cash flow management.

Embracing these payment solutions can result in long-term growth, customer loyalty, and a stronger position in the marketplace.

Enjoy 100+ Payment Options With NTT DATA Payment Options

With cardless EMI and pay-later modes,  customers can enjoy the flexibility of purchasing products and services without needing a physical card. And for businesses, we make accepting and managing payments seem like a breeze with our hassle-free solutions and multiple payment options.

NTT DATA Payment Services offers a complete payment solution to advance both your offline and online businesses from,

• Payment Gateway in India
• POS machines
• IVR payments
• Mobile applications, and
• Bharat QR Scan and Pay

We ensure maximum comfort, convenience, and safety for all your payments.

Conclusion

Innovative and convenient payment solutions like the ones discussed above cater to modern consumers and their needs.

By implementing cardless EMIs, you empower your customers to make purchases without the constraints of upfront payments, increasing their purchasing power and driving sales. Additionally, pay-later payment modes provide flexibility and convenience, attracting more customers to your business and enhancing customer satisfaction.

Embracing these payment options can give your business a competitive edge, expand your customer base, and ultimately contribute to long-term growth and success.

Also, you can get frequent updates on nttdatapayments Instagram page.

Frequently Asked Questions (FAQs)

1. What is no swipe EMI?

No swipe EMI refers to a financing option where customers can purchase on equated monthly instalments without needing to swipe their credit or debit card physically. It streamlines the process by eliminating the need for a card swipe at the time of purchase.

2. What is the risk of BNPL for business?

One of the main concerns of the BNPL payment method is the tendency for consumers to overspend on products they can’t typically afford. This may result in excessive debt that some people may find challenging to manage.

3. Where can I use cardless EMI?

Cardless EMI can be used in various contexts, including mobile apps, e-commerce websites, and online purchasing platforms. Customers can choose to make purchases without having to swipe their cards.