Buy now pay later apps are all the rage in India today. But exactly what are they, and are they really as amazing as you think? We take a look at some of the most used pay later apps in India.
That soul crushing feeling of dying to see a movie, or go out partying with your friends, but not having the money to do so is not unfamiliar. We’ve all been there. Whether it’s for a party or to buy stuff for yourself or for your friends, there comes a moment in every person’s life when you’re not in a position to flush out cash easily. This is where “pay later apps come in”.
Pay Later apps have been gaining quite a bit of traction in recent times, and the COVID-19 situation only accelerated their growth in India. With almost-instant approvals for loans that can sometimes go up to 100,000 INR, these apps have come as a godsend for many. But is the idea really worth all the attention? Or do you have better alternatives? But before that, let’s answer one more critical question – what exactly is a Pay later app?
Pay Later Apps in India
A buy now pay later app is, at its core, an app that lets you use it to pay for a product or service, and not spend a single penny out of your own pocket. You can opt to pay for it later through easy installments. While this may seem similar to your traditional credit cards, it’s not. And the main difference lies in the fact that you use these pay later apps to pay for your product or service, without actually needing a physical card.
Pay later apps have introduced the world to a whole new dynamic – one where the “instant gratification” itch is ever present and more desirable, and while this brings with it its own set of problems (we’ll get to that in a bit), it also helps people solve a lot of daily trouble. Making payments and clearing outstanding dues is no longer a hassle now, because you’ve got money at your disposal. You also don’t have to worry about returning the money on the post. In fact, apps like Lazypay give you at least a 14-day period to return the loan amount, albeit with an interest.
Most of the pay later apps in India have gained inspiration from foreign services like Klarna, that have been able to successfully penetrate the fintech market in their countries and even revolutionized them in some ways.
This is why we’re seeing an increasing number of companies similar to Sezzle, PayPal Credit, AfterPay and many more in the Indian market, of course with more “desi” names.
The pay later option in India is designed to specifically cater to the Indian youth, and people straight out of college – so people in the 18-30 age group. Naturally, they’re made user friendly, easily adoptable, and frequently usable. And frequent use of the app leads to more business owners accepting payments through the app for their services. This is the reason why we’re seeing a spike in the number of users adopting pay later apps in the past couple years – buy now pay later apps in India are facilitating users with endless opportunities, and the most dominant ones in this market are continuing to grow at an alarming rate. Let’s take a look at some of these apps.
ePay Later by Arthashastra Fintech Private Limited is one of the oldest pay later platforms in India, and is a true innovator in the field. Not much of a risk taker, though, as you can only claim a maximum of INR 20,000 with the app. This would be particularly important for people who need to get immediate dues paid on a moment’s notice. ePay Later also makes it easier for users by charging zero interest if the loan is rapid within 14 days. All you need is your PAN card and a valid ID, and you’re good to go.
Not one of the best apps, but LazyPay is surely one of the most popular buy now pay later apps in India, and there are a lot of reasons why. LazyPay is a part of PayU, one of the largest financial service providers in the country, and in Asia.
LazyPay is popular because of its three different payment collecting methods. Once you have the loan credited to your account, you have three options – you can either pay immediately afterwards, you can pay the whole amount after an allotted period of time, or you can simply sign up for EMIs. This, coupled with the attractive offers and up to 100,000 INR loan availability, makes LazyPay an amazing platform for almost anyone to avail an instant loan.
It has been officially said in the Indian pay later website that there are more than 100 merchants accepting LazyPay as a payment option. The company has a 15-day cycle for payment reminders, reminding you of overdue payments on the 3rd and the 18th of every month. This ensures you never miss out on payments, and easily get your loans cleared.
Note: We’ve talked a lot about the LazyPay business model in this article, so be sure to give that a read as well.
Simpl – also known as Simply Pay – follows in the footsteps of LazyPay, with a 15-day payment collecting cycle and large loan payments, although not that large. You do get increased spending limits with prompt payments on loans and by judging how healthy your spending habits on the app are, so that is an added bonus. You also have an auto payment facility that will automatically deduct loan amounts from your account on the due date, so you don’t have to worry about keeping track of all your overdue amounts. Great alternative to LazyPay, if your immediate requirements aren’t huge.
True Paylater by True Balance
Many people haven’t heard of True Balance, and it’s a wonder why. The app is different from all the other pay later apps in India that have tied up with other online merchants. True Balance allows users to pay your electricity bills, mobile bills, and DTH recharges in two payments. You can also claim cashbacks for the recharges you’ve made. True Balance also lends out loans to people, and while the loan amount is not clearly specified, it depends from customer to customer – this is their version of a pay later website, called True Paylater, and it has its own fanbase.
Image Source – Paytm Blog
Paytm is one of the most widely used payment platforms in India, with Google Pay and PhonePe as its closest rivals. Recently, it has also taken into financial crediting for users, and although it takes a bit of time to ensure and approve the loans, you can trust Paytm because of the credibility it offers. The company is also known to almost every person in the country, and is operating in nearly every city, so reach-ability is a big advantage, unlike what we saw with True Balance just now.
The Risks Involved?
Not everything is rainbows and sunshine with these pay later apps and pay later websites. Yes, these apps have a set of problems that they solve, but they also unwillingly create problems that many people in India could do without. For instance, if you pay your dues in time, these apps are nothing short of a miracle worker. There’s nothing more satisfying than getting what you want and paying the right price for it. But if you miss your dues by even a single day, the automated systems make sure you pay a hefty fine.
It also leads to living a more credit-fed life than a “financially-independent” life. The fact that your bank account or even your wallet isn’t touched when you’re out shopping is very fulfilling but it is also very addictive. This eventually leads to financially harmful habits, that surely bring down the whole family as a result sooner or later. Most customers use these apps for the EMI options (which is LazyPay’s major selling point), which is all well and good until you look back and see that all you’re accumulating is EMIs over EMIs, and all those EMIs need to be paid by someone. Who pays for those? (Hint: It’s you)
We think pay later apps are some of the biggest market influencers in India today. They encourage more purchasing amongst customers and in turn develop the nation as a whole. But they may also lead the customers to think that they are purchasing things at a lesser value than what it is. When used in a manner that helps you control your finances better, pay later apps and websites create the best environment for personal growth.
However, they are also dangerous because they will allow the customer to assume or believe that they will have a lot of money in their hands later. Simple math would agree otherwise.