Building trust & reducing friction while purchasing goods is one of the crucial problems in India. BNPL is one of the instruments that does that. Instead of explaining in first principles I will try to explain this using examples.

Note this same approach can be done with wallets and autopay. But I will focus on BNPL here. Wallets can beat this by being more interoperable and having a better UX. But hard to predict the future. Autopay is a good option but it is might not be a good option for small payments.

This article focues on the use cases you can think of solving it with some other instruments as well.

One Tap Payment (micro payments)

For small payments which can help build the pay as you go model the main problem is the friction of payments, namely two types of friction

• the actual feeling of paying (mental load of deduction)
• the long flow for paying such a small amount (log in then multiple redirections)

Both can be solved somewhat by BNPL and making sure the user doesn’t feel like he is paying. The user can pay later and the payment flow can be reduced to a single click.

Instead of feeling like paying for the article each time the user can think of a 1500 BNPL credit as a generic subscription to the entire internet. And just unlocking articles/content anywhere on the internet.

Flow

• user has 1500 as monthly credit for internet subscription
• Browse the internet and find an article you like and unlock with a click and enjoy
• At the end of the month, you get a bill of 1500 and you can pay it off.

Your Tab/Khata (Aka Service Subscription)

You buy milk in India by maintaing a tab with the local shop. You pay at the end of the month. This is a very common practice in India. The same flow can be used for other services like a haircut, salon, etc. BNPL can be used to make this process more digital and easy. Your Tabs now shift to your phone. You can pay at the end of the month. This can be also done by integrating with the local shop’s POS system if there is.

Flow

• Users creates a subscription of milk with the local shop gets a 1500 credit limit
• Each day the milk comes and BNPL pays for it.
• At the end of the month you pay for subscription and the milk you consumed.

TEST/TRY NOW PAY LATER

Don’t worry about wether the size will fit you or not just order it and try it. If you like it keep it else return it. No decution from your account the dedcution will happen past the return period.

Flow

• Buy the product through BNLP
• Try and see it fits matches your vibes
• If you like it keep it else return it without your money going anywhere

PAY IN 3

not explaning just a more digestable version of EMI, works outside INDIA as well klarna is a good example.