What is Buy Now, Pay Later (BNPL)?
Buy Now, Pay Later (BNPL) lets you purchase goods or services and pay for them later in interest-free installments—or as a single bill after a grace period (often 15–45 days). You don’t need a credit card or hefty documentation; approval is quick, and small ticket sizes make it accessible to nearly everyone.
Why Is BNPL Booming in India?
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Credit Card Gap: Only about 5% of Indians have a credit card, but almost anyone can use a BNPL app.
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New RBI Regulations: Stricter KYC and credit reporting for BNPL means safer usage.
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Youth Adoption: Gen Z and Millennials love the ease and flexible payments.
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Tier II/III Expansion: Apps are now open in smaller cities, not just metros.
Market size: The Indian BNPL market is expected to hit $22 billion in 2025 and could double by 2030.
Top BNPL Apps in India – 2025
1. LazyPay
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Where it works: 45,000+ merchants, fast food, travel, e-commerce.
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Credit limit: Up to ₹1 lakh; instant approval.
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Pros: Seamless checkout, popular in smaller cities, no-cost EMI.
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Cons: Complaints about technical glitches; strict penalty for late payments.
2. Simpl
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How it works: Digital “khata” for small purchases; pay bi-monthly.
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Credit limit: Up to ₹25,000.
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Pros: Flexible payment, easy extensions, broad merchant coverage (Zepto, Swiggy, Ola).
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Cons: Payment processing issues for some users.
3. Amazon Pay Later
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Where it works: All Amazon India shopping; 3–12 month EMI or single bill.
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Pros: Easy setup, instantly available for Amazon buyers, no-cost EMI offers.
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Cons: Only for use on Amazon; ineligibility issues for some users.
4. Flipkart Pay Later
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Where it works: Flipkart, Myntra, Cleartrip.
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Credit: Split across up to 48 months for big-ticket items.
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Pros: Simple checkout; multiple offers.
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Cons: Only valid for Flipkart Group shopping.
5. ICICI PayLater
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Where it works: ICICI Bank customers; offered as a line of credit for 1–45 days at 0% interest.
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Limit: ₹7,500–₹2,00,000.
Other notable apps in 2025: PostPe, Axio, ZestMoney (watch for regulatory changes), Paytm Postpaid.
Real User Experiences & Reviews
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Ease of Use: Users love the 1-click, OTP-free checkout, especially for small purchases.
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Grievances: The most common complaints are with late repayment penalties and technical errors leading to failed transactions or bills for unpaid items.
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Hidden Charges: Some users were surprised by late fees and interest rates up to 24%–40% per annum when missing payments.
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Customer Support: Mixed experiences—some apps offer fast resolution, others are slow to respond or unclear about terms.
Is BNPL Really Safe? 5 Mistakes to Avoid
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Debt Spiral Trap: Easy approvals tempt users to stack multiple BNPL debts across apps, leading to a cycle of “robbing Peter to pay Paul” and missed repayments.
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Impulse Purchases: The illusion of affordability fuels unnecessary buying, especially for non-essentials.
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Ignoring the Fine Print: Interest-free periods and penalty structures vary; not reading terms can result in sudden charges.
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Losing Track of Payments: Multiple BNPL plans across apps make it easy to miss due dates—creating surprise late fees.
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Impact on Credit Score: Missed payments can affect your credit even if some providers don’t report to bureaus yet; this is changing with RBI’s new push for credit reporting.
Pro Tip:
Use BNPL only if you’re absolutely sure you can repay your dues on time and track all bills each month.
BNPL vs. Credit Cards: Which is Better?
| Feature | BNPL | Credit Card |
|---|---|---|
| Upfront Approval | Instant, soft check | Hard credit check, slower approval |
| Usage | App-linked (specific stores) | Universal merchant acceptance |
| Interest | 0% if paid on time, else high | 0% for 45 days, then 36–48% p.a. |
| Penalties | Fixed late fee, usage bans | High interest, credit score drop |
| Rewards/Points | Rare | Common: cashback, air miles, rewards |
| EMI/Easy Pay Conversion | Yes (often no-cost) | Yes (with fees) |
BNPL is great if you’re credit-invisible or just need short-term flexibility, but credit cards still offer more rewards and broader merchant acceptance.
Latest RBI and Regulatory Changes
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2025: RBI has mandated BNPL providers to report all loans and defaults to credit bureaus to prevent shadow debt.
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Certification: New certification requirements for BNPL apps are rolling out, with stricter KYC and consumer protection standards coming up.
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Merchant Responsibility: Retailers are now encouraged to only list BNPL options that are certified and transparent about their fees.
Frequently Asked Questions (FAQ)
Q1: Is BNPL really interest-free?
Yes, but only if all dues are paid on time. Late payments attract high fees and sometimes steep interest.
Q2: Does using BNPL improve my credit score?
Not always. As of 2025, more BNPL providers are reporting to bureaus, but good repayment is essential for a positive impact.
Q3: What if I miss a payment?
Expect instant late fees, possible usage bans, and (increasingly) credit score damage.
Q4: Can I use BNPL everywhere?
No, it’s app/merchant specific. Check which platforms and stores support your preferred BNPL app.