Today’s current era is modern. People want to improve their living standards. But for some people it becomes difficult due to children’s education fees, health care expenses, or reduced salary, Buy Now Pay Later (BNPL) offers people the ability to purchase the product they need and want and pay at a future date. BNPL is a sort of short-term financing in which consumers typically pay over a short 60- to 90-day term. BNPL is a modern shift away from credit cards, typically boasting benefits of no interest, no long forms to fill out, and generally less “fine print”. Top companies in 2021 offering these services are as follows:
Affirm was established in 2012 and works as a financial lender, provides loan facilities to small customers and they have to repay the loan with interest-free installments. In 2012-2016, Affirm provided short-term loans to consumers to purchase the product they needed, and in 2017 it launched an online shopping app for the purchase of retail products. Affirm launched their app with the vision “When you buy with Affirm, you always know exactly what you’ll owe and when you’ll be done paying. There are no hidden fees, not even late fees”. Affirm provides three schedules of payment to customers: three weeks, six weeks, and twelve-month payment schedules. Consumers have to select according to their convenience.
Klarna was established 15 years ago in Sweden and transferred to Australia through CommBank. Klarna believes to pay later and own first. To purchase from Klarna customers need to sign in to their app and then create a “ghost card”. They can then select the amount they wish to use. If this amount has been approved the customer can use this card to purchase the products they want online. But it is advised to all customers to remember to check the terms and conditions for any fees before applying. The most common payment schedule involves paying 25% of the cost during checkout, and the remaining balance over the course of 6 weeks. They also offer 6, 12, 18, and 36-month loan options, which come with an APR.
Quadpay was founded in 2017; in their initial stage, they offered services in the US market. Quadpay provides point-of-sale loans to consumers. They purchase their particular items from retailers that are partnered with QuadPay and consumers can split the cost into 4 interest-free installments. Quadpay also works with some largest brands in the US such as AOS, Apple, Forever 21, Lululemon, Nike, Walmart, Poshmark, and so many other partners. Quadpay earns money by taking a fee from the merchants. In the current era, there is a gap in this field so; new companies rapidly entered this market to compete, including PayPal (with their Pay in 4 program) and SplitIt.
Sezzle was established in 2016 and works with this vision: “we believe that financial freedom can be achieved by all”. Sezzle, just like QuadPay, enables consumers to split the cost of an online purchase into 4 interest-free installments, with the first payment being due at checkout. They also generate their revenue by taking a fee from the merchant. Sezzle offers a $2500 limit to customers, although not all will be approved for this limit. Many factors go into approval, including identity verification, past history with on-time payments, and a soft credit check that is run while checking out.
Abunda is an e-commerce platform based in the US that empowers the customer to buy now and pay later for Amazon products. Amazon is known for having millions of products, and Abunda was created to create more access to them. Customers can browse Abunda for the Amazon products they want, build a cart, and choose a payment plan during checkout. If a product is unable to be found, the Amazon product URL can be pasted into the search bar, and Abunda will fetch that product. Unlike the other BNPL companies, Abunda does not offer their own financing; rather, they partner with other financiers so people can select their already known and loved payment plan. Their current partners are Klarna, QuadPay, Shop Pay, PayPal, and ViaBill, all of which have different payment plans and benefits. Abunda is constantly expanding its list of finance partners and will also soon support other big retailers other than Amazon.