Over the previous couple of years, the Buy Now Pay Later (BNPL) services have grown leaps and are bound to turn into a prominent kind of financing. In India, authorities say the demand for BNPL has been expanding for about 3-4 years, additional accelerated by COVID-19. BNPL has now emerged as a more practical payment process basically decreasing the monetary burden on borrowers by providing no-price EMIs.
Various BNPL providers have additional created and sweetened their offerings to enable borrowers handle their finances. For instance, Simpl, LazyPay, and Ola Money are solving for one-click comfort for the higher frequency of transactions. Similarly, Bajaj Finance and Zest revenue are solving for the affordability, by assisting one to purchase a fridge worth 80k for 30k and the rest can be paid by EMI. Uni Pay, on the other hand, aids the borrower in managing their money flow issues with the Uni Pay 1/3rd Card.
While most of the spend later items in the industry are digital and not physical cards – they are normally merchant dependent and only work inside a merchant network and the credit lines are reduced. Comparatively, the Uni Pay 1/3rd is each a physical and a digital card and runs on the Visa network, providing the borrower access across millions of merchants.
How will it advantage borrowers?
The physical card of Uni Pay 1/3rd can be made use of as a credit card at any merchant outlet on the visa network. Borrowers also get flexibility on a transaction level – for instance, they will get the choice of deciding on to split the payments into 3 components or spend in the similar month and delight in added cashback. For any transaction performed by way of this card, the buyer can spend more than 3 months at no further price. For instance, if you make a transaction worth Rs 3,000 and opt for the 1/3rd choice, it becomes Rs 1000 month 1, Rs 1000 on the second month and Rs 1000 on the third month. And if you determine to spend back the complete quantity at the finish of the initially month like for a standard credit card, then you will get 1 per cent cashback or reward.
Nitin Gupta, Founder and CEO, Uni says “The core idea behind the Uni Pay 1/3rd card is that it helps manage short term money needs while giving the flexibility to earn rewards as per choice. It is the longest interest-free credit product in the market. It questions traditional ethos around credit cards that penalise borrowers for short term fund requirements.”
Unlike other credit cards and BNPL possibilities Pay 1/3rd card presents the borrowers the decision to Pay 1/3rd or get 1 per cent rewards based on their desires, and this is customizable down to every single transaction. This BNPL solution presents comfort, wherein an person can either make a acquire and spend later or make a payment or break it down into EMIs. Hence, one can divide his/her transaction into longer-term EMIs in the future.
However, Gupta adds, “Pay 1/3rd card is not a credit card but a PayLater card. A credit card has a 30 days payment cycle and the borrower gets a credit period of only 30 days.” To get a longer tenure of credit period, Uni’s PayLater card below the Buy Now Pay Later line presents the choice with zero balance prepaid card. It also comes with a credit limit ranging involving Rs 20,000 to up to Rs 6 lakhs. Once a transaction is completed utilizing this BNPL choice, the borrower desires to choose the month-to-month or one-time payment choice by way of the Uni app.
Charges and Interest prices
Late charges will be applicable for transactions that are not paid beyond the 3 months of payback time. This BNPL Pay 1/3rd card has a flat charge for paying the minimum quantity and missing payment beyond the due date.
In any BNPL solution such as Pay 1/3rd, the minimum due quantity has to be paid in every single billing cycle, or else the borrower will have to spend late costs which are decided based on the slab. However, as opposed to a credit card, there are no interest charges. Also, if one fails to make a payment for a period, there is no charge on interest or interest on interest charged.
The Uni spend later choice comes with a joining charge of Rs 1999, which is waived off till 31st December 2021.
How does this line of credit impact your credit score?
Experts say the influence of the Uni Card is comparable to that of a credit card. Timely and constant repayments will improve the credit score and late payments will also have an impact.