From Simpl to Paytm Postpaid ⁠— these are the penalties on late payments on Buy Now, Pay Later schemes

• Buy Now, Pay Later schemes by e-commerce platforms may look attractive but charge you a higher amount if you miss any payment deadline.
• Suppose you took a cab ride of ₹1,500 on Ola and paid through Ola Money Postpaid. If you forget to pay the amount in the next 15 days then you will be charged ₹100 the other day.
• Online platforms like Paytm Postpaid, Ola Money Postpaid, Amazon Pay Later and Flipkart PayLater charges up to ₹600 fees if you miss any deadline dates.

Just like credit cards, Buy Now, Pay Later (BNPL) schemes allow you to buy products beforehand and pay the total amount in installments. You must be aware of Paytm Postpaid, Ola Money Postpaid, Amazon Pay Later, Flipkart PayLater and several others.

To help you understand the steep charges by online platforms that have Buy Now, Pay Later scheme here is an example. Suppose you took a cab ride of ₹1,500 on Ola and paid through Ola Money Postpaid. Later if you forget to pay the amount in the next 15 days then you will be charged ₹100 the other day. Also, this amount will keep on increasing every cycle if you miss future deadlines.

During the last couple of years and also because of covid infused financial stress, BNPL schemes have become very popular among young who are new to the credit space. Macquarie expects the total amount of loans disbursed through such schemes to be anywhere between $45 billion and $50 billion by March 2026.

The current market is still very small ⁠— about 0.7% of all bank loans and about 2.07% of loans given by the non-banking financial companies, $4.

While these schemes do serve the purpose of buying products on time and paying later, one should be aware about the high cost in late payments.

How does BNPL work?

• Buy a product at an online or e-commerce platform
• Select ‘Buy Now, Pay Later’ option
• Make a small down payment of the overall purchase amount
• The remaining amount shall be debited in a series of EMIs

Most BNPL schemes offer a smaller repayment window of 15 to 30 days and charge up to ₹600 fees if you miss the deadline.

Company	Late fees
ZestMoney	₹250+ 1% per day on late repayments
Simpl	₹250 per cycle default
ePayLater	₹100 per cycle default
KrazyBee	₹500+ 0.2% penalty charge per day
Paytm Postpaid	₹10-500 per cycle default
Amazon Pay Later	₹100-500 per cycle default
Mobikwik Zip	₹20-200 per cycle default. Plus 1% late fee after 3rd cycle
Flipkart PayLater	₹60-600 per cycle default
LazyPay	₹50-500 per cycle default

Source: Macquarie report dated November 18, 2021

BNPL looks attractive but is definitely not a win-win situation for consumers. These steep late fee charges indicate significant revenue for the company, said analysts at global brokerage firm Macquarie Research.

What should you do?

Educate yourself about the interest charges including processing fee, which you would be paying before you make your purchase via the BNPL option, on the total amount before buying a product through BNPL.

It is best to use the BNPL option when you are sure of paying the entire due amount before the due date.

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