The companies that tread with pay later feature generally tend to bypass the conventional loan giving method
The ‘buy now, pay later culture has gained immense popularity in the digital world we live in. Recently PayPal, a popular name in the online payments segment, had made an announcement that it is buying Paidy Inc. The deal was closed after Square Inc’s $29 billion deal with Bed Bath & Beyond, Macy’s, and Afterpay to added the buy now pay later option at their checkout in 2020. Even the popular ecommerce giant Amazon.com is successfully using this feature. The motto of the pay later features to make credit accessible for people with low credit scores who are ineligible for credit cards.
The companies that tread with pay later feature generally tend to bypass the conventional loan giving method. This gives them more opportunities to approve loans for more customers. When customers are given the power to purchase without cash in hand, they will spend more, in turn increasing the sales for the retailers. Afterpay is speculated to make close to $8.2 billion this year due to the recently introduced payment plans. Shoppers are now spending more at Macy’s because it has a tie-up with Klarna Bank to provide an installment option for its customers. This pay later culture is very appealing to young buyers, and it is very convenient.