Main Reasons Behind The Growth Of Buy Now Pay Later Model : A Lifestyle Change In How People Handle Money.
Bipanchy Goswami
July 22, 2025. 4 minute Read
Just a few years ago, the idea of buying a ₹12,000 sneakers in four months seemed a distant dream; today, it’s the norm. Welcome to the age of Buy Now, Pay Later (BNPL)—a financial revolution that’s reshaping the way we shop, spend, and save.
But, here is the thing!
There is a negative behavioral shift here while buying an Iphone seems affordable for many; but buying insurance for themselves seems like a daunting task here.
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In this article, we will be talking about the significant changes in consumer finance. New college students and new parents buying essentials are using BNPL more and more. But why is it expanding at this breakneck speed?
All this on The One Liner.
What is Buy Now, Pay Later?
Buy Now, Pay Later (BNPL) is a flexible payment option that allows customers to split the cost of a purchase into smaller, interest-free installments over a set period. Offered at checkout by providers like Klarna, Afterpay, and Affirm, BNPL is designed to be fast, accessible, and doesn’t require the use of a traditional credit card.
Think of it this way rather than paying ₹70,000 upfront for a new phone, you could simply pay ₹5,000 every two weeks. That’s the appeal of BNPL: immediate access, manageable payments, and seemingly no strings attached. At least, on the surface.
- Immediate access,
- Manageable payments, and
- Seemingly no strings attached.
At least, on the surface!
Driving Factors Behind The Growth Of Buy Now Pay Later Model
At its core,Buy Now Pay Later (BPL) taps into the modern consumer’s craving for convenience, control, and instant gratification. And Gen Z and millennials? They’re leading the charge.
1. Flexibility and Convenience
Gone are the days of rigid financial tools. Buy Now Pay Later (BPL)’s flexible repayment structure allows users to better manage cash flow—especially during months when budgets are tight.
2. Millennials and Gen Z Shoppers
Digital natives want control. Buy Now Pay Later (BPL) appeals because it doesn’t carry the baggage of credit cards or long-term debt. According to Worldpay’s Global Payments Report (2023), BNPL accounted for over 9% of global e-commerce transactions—a huge leap driven by younger users.
3. Interest-Free Installments
Unlike credit cards with their double-digit interest rates, most Buy Now Pay Later (BPL) providers offer zero-interest payments if paid on time. That “no extra cost” factor is irresistibly attractive.
4. Instant Credit Access
Buy Now Pay Later (BPL) providers make credit more accessible—no long forms, no bank visits, no weeks of waiting. Just a few clicks, and you’re approved.
5. Financial Inclusion
For individuals with poor or no credit history, Buy Now Pay Later (BPL) provides an alternative route to essential purchases without relying on traditional lenders. This inclusivity is a game-changer, especially in emerging markets.
6. COVID-19 as a Catalyst
During the pandemic, as savings shrank and uncertainty loomed, Buy Now Pay Later (BPL) became a financial lifeline for many. Its usage jumped dramatically as people sought ways to manage spending without going into deep debt.
Merchant Benefits and E-commerce Acceleration
Buy Now Pay Later (BPL) isn’t just a win for consumers, it’s a rocket booster for businesses, too.
1. Higher Sales and Conversions
According to a Shopify report, businesses offering Buy Now Pay Later (BPL) saw a 20-30% increase in checkout conversions. Why? Because it reduces sticker shock. That $800 couch suddenly feels more doable at $200 x 4.
2. Boost in Average Order Value (AOV)
Buy Now Pay Later (BPL)encourages upselling. If you’re only paying a fraction today, why not add that matching rug or tech accessory? Klarna reported a 45% increase in AOV among partnered merchants.
3. The E-commerce Boom
Buy Now Pay Later (BPL) grew in tandem with online shopping. As consumers shifted digital during lockdowns, BNPL positioned itself as the perfect companion to e-carts worldwide.
4. Improved Cash Flow for Merchants
Most Buy Now Pay Later (BPL) providers pay merchants upfront, taking on the repayment risk themselves. That means better liquidity and fewer financial headaches for the seller.
5. Enhanced Customer Loyalty
When consumers feel financially empowered and less pressured at checkout, satisfaction soars. Happy shoppers = repeat shoppers.
The Bigger Picture: A Shift in Consumer Finance
Buy Now Pay Later (BPL) is not just a shiny new fintech feature—it’s part of a broader trend toward democratizing finance.
1. Financial Literacy on the Rise
Buy Now Pay Later (BPL) forces users to think in terms of affordability, installment management, and budget planning—building smarter spending habits.
2. Global Expansion
Buy Now Pay Later (BPL)usage is rising across markets—from the US and UK to India and Southeast Asia. New local players are entering with customized models tailored to cultural and regional nuances.
3. Strategic Partnerships
Banks, credit card companies, and even tech giants like Apple are entering the Buy Now Pay Later (BPL) ring. The competition is fierce—and consumers are reaping the benefits.
4. Regulation is Coming
As the sector matures, regulatory frameworks are catching up. Transparent terms, credit checks, and consumer protections are becoming more common—further legitimizing the model.
Real-Life Impact: The Story of Ananya
Ananya, a 27-year-old content marketer in Mumbai, needed a new laptop for her freelance side hustle. She didn’t want to max out her credit card or dip into savings. Using a Buy Now Pay Later (BPL) option on an e-commerce site, she secured a high-end laptop and paid it off over six weeks.
“It gave me breathing room. I didn’t feel overwhelmed or guilty for investing in my work,” she says.
Multiply Ananya’s experience by millions—that’s the ripple effect of BNPL.
Let’s Be Honest—It’s a Journey
Cultivating unconditional self-worth won’t happen overnight. But it does happen. Slowly. Gently. Honestly.
It looks like:
- Saying no when you’d usually people-please.
- Resting without guilt.
- Smiling at the mirror—on bad hair days.
- Shape your money mindset
And mostly? It looks like choosing yourself again and again.
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Final Thought
In a nutshell!
Buy Now Pay Later (BPL) isn’t just a trend—it’s transforming how Indians spend. Platforms like Flipkart and Amazon are feeling the heat as third-party BNPL players like ZestMoney and Simpl swoop in, offering faster, simpler credit at checkout. These e-commerce giants now shell out more in commissions and lose direct EMI control, especially as BNPL spreads across Tier 2 and Tier 3 cities.
For everyday Indians, BNPL means access without the burden—students, young couples, freelancers are all jumping on board. But here’s the catch: it’s still credit. Miss a payment, and you face penalties or credit score dips.
So, use BNPL wisely. It’s a powerful tool if managed well—but a trap if treated like free money.
Frquently Asked Questions
- Is BNPL better than credit cards?
It depends. Buy Now Pay Later (BPL) is great for small, planned purchases. But unlike credit cards, it doesn’t help build credit history. - What happens if you miss a BNPL payment?
Late fees and account restrictions. Some providers may report to credit agencies. - Is BNPL safe for merchants?
Yes. Merchants get paid upfront while the BNPL provider handles repayment. - Why is Gen Z obsessed with BNPL?
They love flexibility, hate debt, and are digital-first. BNPL speaks their language. - Will BNPL replace traditional loans?
Not entirely. But it’s definitely becoming the go-to for short-term, low-ticket financing.
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