At the time when India is moving towards the digitization of the online payment ecosystem, the newest upgrade in the market is that of buy now, pay later applications. As the name suggests, these apps allow customers to buy goods and services from merchants and pay for them at a later date. Pay Later apps provide the perfect solution to these issues and provide an interest free line of credit to customers in a secure and seamless manner.
There exist some inherent problems with existing payment options which provide a line of credit to customers including logging into your bank account in order to complete every transaction and provide details such as bank details, PIN and others in order to successfully complete the transaction.
What is PayLater?
PayLater is a concept which enables the customers to make purchases and pay for the same at a later date. The idea is similar to that of a credit card but there is no physical credit card present. One can easily make a transaction and later settle the amount at the end of the credit cycle which usually is 14-days long. PayLater method is generally considered safer and more seamless when compared to a credit card as no sensitive information such as credit card number and account details need to be provided.
Multiple merchants have incorporated PayLater apps as an option under payments as the market for the same is growing exponentially.
Some prominent examples of PayLater apps include: Freo Pay, ICICI Bank PayLater, Simpl and others.
What is PostPaid UPI?
PostPaid UPI is a unique amalgamation of Unified payments interface (UPI) and credit. With PostPaid UPI, the UPI ID gets linked to the credit limit that a customer might have. PostPaid UPI applications such as Chillpay allow users to make purchases online and pay for them over time in installments. PostPaid UPI provides interest free credit amount to users and if one pays off their dues before the end of the credit cycle then they can avoid all additional charges levied on due to late payment.
PostPaid UPI not only allows customers the option of interest free credit but also helps build credit score. If one chooses to use PostPaid UPI and pay off their dues in time, their credit score will be hugely benefited from the positive credit history.
In this blog we deep dive into the concept of buy now – pay later apps, some of the benefits they present to the customers and some of the biggest players in the market such as Chillpay.
What are the benefits of pay later apps?
Buy now pay later apps allow consumers to make a purchase even if they don’t have funds available at their disposal. Some other benefits they offer are:
- Easy access to credit: PayLater apps offer instant line of credit to customers which makes the entire transaction extremely convenient. Customers can make use of interest free credit for a 14 days credit cycle.
- Safety first: As details such as card number, account details, PIN and others are not required for a PayLater app to complete a transaction, it makes the process of purchasing online extremely safe and seamless for the customers.
- Helps save money: PayLater apps allow you to make purchases without using your own funds. You can earn easy interest for 14 days and use the credit provided by PayLater apps.
Which are the top buy now pay later apps?
Freo Pay is a PayLater app which provides credit upto INR10,000 for purchase at any merchant online or online store. Freo Pay can be used on any place with a merchant UPI ID. One can easily scan the QR code and pay at the outlet. While shopping online, the customer can use their unique Freo Pay UPI ID and checkout. The amount of credit allotted depends on factors such as income, credit history and so on. Customers can use their approved credit limit, interest free for 30 days!
ICICI Bank PayLater
ICICI was the first bank in India to offer pay later services to the customers. The credit limit provided by ICICI ranges from INR 5,000 – 20,000 depending on the income and credit worthiness of the customer. One can easily link their bank accounts to the pay later service and opt in for an auto debit option to pay their dues on time.
FlexiPay by HDFC Bank
FlexiPay by HDFC offers credit limit ranging from INR 1,000 to INR 60,000 instantly. It provides an interest free credit for the duration of 15 days. There are no convenience charges or processing fees that are charged by the application for their buy now pay later service.
True PayLater has been introduced by True Balance. They have tie-ups with multiple online merchants and one can even use it to pay electricity bill, phone bill, DTH charges among others. There are also cashback offers available for customers to use once the entire due amount is paid off. The maximum cashback that can be received is INR 150.
ePayLater allows a credit limit of INR 20,000. One needs some identity proof such as PAN, Aadhar and so on to sign up for the app. This application is best suited for people who love to travel as one can easily book bus tickets, hotels using the same. Pay later facilities on portals such as IRCTC, Ixigo and others are also available.
GetSimpl has a 15 day credit cycle and allows transactions with multiple merchants. Even Though, there is an initial default spending limit on the app, it keeps getting updated based on factors such as repayment history, profile strength, spending habits and others. If one keeps paying off their dues on time, their credit limit is bound to increase over time.
LazyPay is a part of PayU, a leading financial services provider. There are three different services it offers namely – PayLater, instant personal loan and EMI option. One can easily sign up for LazyPay using their mobile phone. It is a widely accepted buy now pay later application with over 100 merchants accepting payments using this app. The credit cycle offered by them is 15 days.
What is the credit limit for Freo Pay?
The credit limit for Freo Pay INR 10,000 which makes it the perfect go to application for small credit requirements. Freo Pay’s credit on UPI is a fail-proof system which is the perfect solution for everyday transactions. It allows one to buy what they want now and pay for it later making it extremely convenient to use.
How to apply for the Freo Pay credit limit?
Here are the steps that need to be followed to apply for credit limit with Freo Pay:
- Install the Chillpay app in your smartphone
- Details such name, income, DOB and others need to be provided
- Once you register with these details, you will soon be approved for a credit limit
- Now you can easily scan and pay at various merchant outlets.
What things can I shop now and pay later using Freo Pay?
Here is a list of things one can buy now and pay for later using Freo Pay:
- Home appliances: Appliances such as TVs, ACs, washing machines and others can easily be bought at a no-interest credit.
- Tech gadgets: One can purchase the latest laptops and smartphones using Freo Pay.
- Clothing: One can purchase apparel and accessories from leading fashion merchants such as Myntra using the credit free limit available.
- Travel: One can avail credit options using Freo Pay even while booking holiday packages on online outlets such as MakeMyTrip, Yatra and others.
- Insurance: One can get insurance cover using Freo Pay’s credit limit using EMI plans with online merchants such as policybazaar, SBI insurance among others.
- Education: One can also buy educational courses online by using online platforms such as UpGrad, SimpliLearn and others by using the buy now pay later feature of Freo Pay.
How to send money using Freo Pay UPI?
You can Scan QR code and Pay at your favourite merchant outlets using Freo Pay. To make transactions online, you can use your unique Freo Pay UPI ID at the checkout.
How much credit amount do I get on Freo Pay?
You can get instant approval for a mini-credit limit ranging between INR 500 to 10,000 based on your profile fundamentals such as income level, existing loan dues and so on.
Furthermore, you can use this credit limit for paying bills & shopping online or offline wherever UPI payments are accepted.
How will I be charged for using Freo Pay?
The bill is generated on the 1st of the following month. All your transactions are consolidated in a single statement.
When is the repayment due date?
You have to repay your dues by the 5th of the month. Late fees of INR 30/day will be added for every day after the 5th, which will be capped at INR 900 + 18% GST.
Can I send money to my friend?
No, you can only use Freo Pay to transact with different merchants (local traders such as bakers, grocers, shopkeepers, etc.) with UPI IDs. Transferring money to non-merchants is not allowed.
Can I withdraw money using my UPI handle?
No, one can only transact with different merchant accounts using their UPI IDs. Withdrawing money to your account is not allowed.