If you’ve recently paid for something online, you may have noticed a new option appearing on the checkout page: Buy Now Pay Later (BNPL). It’s reasonable that deferring all or part of your payment appeals to you because it allows you to spread out the cost of your purchase and make it more bearable.
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BNPL plans are effectively interest-free loans that appeal to persons with no credit history or who have never used a credit card, making them particularly appealing to Gen Z. However, there are a few disadvantages to buying now and paying later.
Not only may it be a slippery slope that leads to you spending above your means, but there’s also the risk of becoming a victim of fraud, which BNPL brands can guard against using fraud detection methods like machine learning and device fingerprinting.
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The expansion of this industry has brought with it its own set of dangers. Because it serves as a wallet for many clients, it has been identified as an attack vector, attracting criminals and facilitating buy now pay later fraud. We looked at how BNPL schemes have grown in popularity over the last few years, as well as who is most likely to utilize them.
What Has Caused the Increase in BNPL Use?
Anyone who shops online can see how popular BNPL services have become, but how much have they grown recently?
In 2016, BNPL schemes accounted for only 0.4 percent of global ecommerce payments; by 2019, they had doubled to 1.6 percent, and by 2020, they were at 2.1 percent
Klarna, the UK’s largest BNPL provider, has had its user base more than quadruple in less than two years, rising to 15 million as of November 2021.
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Which countries make the most use of BNPL?
Sweden is the country where BNPL has gained the most traction so far, accounting for a quarter of all online payments (25 percent ).
Klarna was formed in Sweden, which may explain why these types of services are so popular in the country, which has seen a significant expansion in its overall ecommerce sector.
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What Can You Do to Avoid BNPL Fraud?
Unfortunately, BNPL fraud is a serious concern to both customers and merchants — as well as BNPL enterprises, which stand to lose much more.
Fraudsters can attack merchants in a variety of methods, including identity theft and financial fraud attacks.
Even if the BNPL provider is held liable if something goes wrong, your reputation as a store can suffer, and if the client files a chargeback complaint, you could lose your inventory without being paid, even if you aren’t at fault.
The Bottom Line
The BNPL industry is moving and booming the market like hell. However, you need to be extra careful while utilizing the tactics of BNPL. As the greed to buy new gadgets and items never ends, you may fall into a trap of debt if you don’t categorize your expenses. Create a pile of necessary, non-necessary and luxurious items and then decide your buying schedule. This way you will learn to manage your expenses and can avoid falling into an unnecessary debt trap.
To avail yourself of the best BNPL cards, make sure to maintain your CIBIL score. Although the lenders provide BNPL cards to new credit users also, it is always healthy to go with a good history of repayments. This will benefit you to obtain a higher credit limit and flexibility in repayment terms. You can also get discounts and other benefits on transactions also.
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