BNPL(BUY NOW PAY LATER) is the hottest business model of 2021. My opinion on this.
The buy now pay later business model is a popular one in the startup world. The idea is that if you buy something now, and pay for it when your earnings come in, then you can buy more than you would otherwise be able to afford. This may not sound like such a bad deal at first glance but what about people who buy things they cannot afford because of this easy credit?
This buy now pay later business model has many benefits such as allowing people to buy things that they normally couldn’t because of lack of funds and access to credit cards or loans, but it can also lead to bad financial decisions if not used carefully by the consumer. Companies like Affirm allow customers who buy products through them using this process (known as “financing”) to repay their purchases over time with interest rates starting at zero percent for select goods; however there are some caveats attached too which I will discuss later on in this text.
First of all, buy now pay later businesses take advantage of the fact that many people buy things impulsively and don’t think through their decisions carefully. This might not seem like such a bad thing at first glance — everyone needs to buy food or groceries right? However I believe it can lead to consumers spending more than they would normally spend on necessities if they are able to buy them “on credit”. The reason for this is because these companies make money by charging interest rates (typically around 30%) which means users will end up paying much more in the long term than what they initially spent on products; perhaps even double!
People often forget about how much cash purchases cost until after purchase; when you use buy now pay later services, the money is taken from you upfront and right away, which can lead to poor decision making. This normally isn’t a problem if people buy things they need like groceries or household appliances but it could be an issue for those who buy luxury items such as jewelry or new electronics; unless of course this was planned in advance.
In my opinion, buy now pay later businesses should offer some kind of limit on how much goods can cost (for example no more than $500) so that users don’t end up spending too much too soon without thinking through their decisions carefully beforehand. I also think companies must ensure all products bought go directly into buyers’ bank accounts because many have been ripped off by middlemen before meaning they never received what they paid for.
Buy now pay later businesses are legitimate but there needs to be some regulation on them as well as restrictions on how much money users can spend using their services. In addition, I believe that companies must ensure all goods bought through them go directly into a buyer’s bank account without any middleman involved so no one gets ripped off.
