Step 1: Shop at partner merchant (online/offline)
Step 2: Choose BNPL at checkout
Step 3: Quick verification (PAN, phone, sometimes income)
Step 4: Purchase approved instantly
Step 5: Receive goods/services immediately
Step 6: Pay later per scheme (15 days, 30 days, EMI)

How It Works:
- Buy today
- Pay full amount in 15-30 days
- Usually zero interest if paid on time

Example:
Purchase: ₹5,000
Due: 15 days later
Pay: ₹5,000 (no interest)

Late Payment:
- Interest kicks in (18-36%)
- Late fees

How It Works:
- Split payment into 3-6 parts
- Pay equal amounts every 2 weeks/month
- Often interest-free

Example:
Purchase: ₹6,000
3 Installments: ₹2,000 each
Interval: 14 days
Total Paid: ₹6,000 (if on time)

How It Works:
- Convert to traditional EMI
- Interest charged (12-24%)
- Longer tenure (3-12 months)

Example:
Purchase: ₹30,000
EMI Plan: 6 months at 15%
EMI: ₹5,212
Total Paid: ₹31,272

How It Works:
- Pre-approved credit limit
- Use for any purchase at partners
- Revolving credit

Example:
Limit: ₹50,000
Buy Phone: ₹20,000
Remaining: ₹30,000
Repay: Limit restores

For Online Shopping:
- Flipkart Pay Later (for Flipkart)
- Amazon Pay Later (for Amazon)
- LazyPay, Simpl (multi-merchant)

For Travel:
- ZestMoney (higher limits)
- Bank BNPL products

For Daily Expenses:
- Paytm Postpaid
- Simpl
- LazyPay

Basic Requirements:
- Age: 18-60 years
- Indian citizen
- Valid phone number
- PAN card
- Bank account

What's Checked:
- Basic KYC
- Credit score (sometimes)
- Phone number verification
- Income (for higher limits)

Step 1: Download app or visit checkout
Step 2: Enter phone number
Step 3: OTP verification
Step 4: PAN card entry
Step 5: Basic details (name, DOB, address)
Step 6: Instant credit limit assigned
Step 7: Start using

Time: 2-5 minutes
Documentation: PAN, phone, selfie (sometimes)

Initial Limit Based On:
- Credit score
- Income (if provided)
- Phone number history
- Existing relationship

Limit Increase Over Time:
- Timely repayments
- Regular usage
- Income verification
- Request increase option

Traditional Credit Card:
- Apply: 7-14 days
- Documentation: Extensive
- Income Proof: Required

BNPL:
- Apply: 2 minutes
- Documentation: PAN only
- Income Proof: Often not required

Smart Usage:
- Buy on Day 1
- Pay on Day 15
- Zero interest

Effective Benefit:
- 15-30 days free credit
- Float your money
- Earn interest on your funds meanwhile

For Those Without Credit Card:
- Get instant credit
- Build digital payment history
- Start credit journey

Large Purchase: ₹15,000
Full Payment: Difficult

Split into 3:
₹5,000 × 3 = Manageable
Easier on monthly budget

The Psychology:
- "Pay later" feels like not paying
- Easy approval reduces friction
- Multiple BNPL accounts compound issue

Example:
LazyPay: ₹20,000 spent
Simpl: ₹15,000 spent
ZestMoney: ₹25,000 spent
Total BNPL Debt: ₹60,000

Suddenly: Large dues in short period

Typical Penalties:
- Late fee: ₹100-500 per instance
- Interest: 18-36% annual (starts immediately)
- Penalties can exceed purchase value

Example:
Purchase: ₹1,000
15 days late
Late fee: ₹250
Interest: ₹30
Total: ₹1,280 (28% more in 15 days!)

BNPL and Credit Bureaus:
- Many BNPL providers now report to bureaus
- Late payments hurt your score
- Multiple BNPL inquiries may impact score
- Affects future loan eligibility

Trap Pattern:
1. Buy on BNPL (can't afford now)
2. Due date arrives (still can't afford)
3. Pay minimum, carry balance
4. Interest accumulates
5. Use BNPL again for necessities
6. Deeper debt

Prevention: Only use for purchases you could pay cash for

Problem:
- BNPL linked to subscriptions
- Forgot about recurring charges
- Auto-debit fails
- Penalties accumulate

Solution:
- Review all linked services
- Set calendar reminders
- Don't link to recurring payments

Golden Rule:
If you can't pay cash, don't BNPL

Purpose of BNPL:
- Short-term convenience
- Payment flexibility
- Not for living beyond means

Wrong: "I'll figure it out later"
Right: "I have the money, but prefer BNPL for cashflow"

Late Payment Impact:
- High fees
- Interest charges
- Credit score damage
- Limit reduction

Prevention:
- Set reminders before due date
- Enable auto-pay from bank
- Keep buffer amount always

Recommended: 1-2 BNPL accounts maximum

Why:
- Easier to track
- Less temptation
- Simpler budgeting
- Avoid over-leveraging

Tracking System:
| Provider | Amount | Due Date | Status |
|----------|--------|----------|--------|
| LazyPay | ₹3,000 | 25th | Pending |
| Amazon | ₹2,000 | 30th | Pending |

Update: Weekly
Review: Before making new purchases

Better: Pay in 15-30 days
Okay: 2-3 month no-cost EMI
Risky: Long-term EMI with interest

Longer Term = More Time to Forget = Higher Risk

BNPL Better When:
- No credit card available
- Specific merchant discount
- Small, planned purchase
- Short-term convenience

Credit Card Better When:
- Rewards matter
- Universal acceptance needed
- Building credit history
- Travel purchases
- Large amounts

"0% Interest" Reality Check:

Purchase Price: ₹5,000
Payment Options:
1. Cash now with 5% discount: ₹4,750
2. BNPL 0%: ₹5,000

True Cost of BNPL: ₹250 (lost discount)

EMI BNPL:
Purchase: ₹20,000
6-month EMI at 18%
EMI: ₹3,530
Total: ₹21,180
Interest Paid: ₹1,180

For ₹20,000 purchase, you paid ₹21,180

Money Tied in BNPL Payments:
Monthly BNPL: ₹10,000

If Invested Instead (at 10%):
₹10,000/month for 5 years = ₹7,74,000

BNPL keeps you paying, not investing.

RBI Guidelines (2022):
- BNPL providers must partner with regulated lenders
- First-loss default guarantee rules
- KYC requirements strengthened
- Transparency on fees mandatory

Required Disclosures:
- Total cost of credit
- Late payment charges
- Interest rates (if applicable)
- Partner lender details

Grievance Mechanism:
- BNPL provider must have process
- Can escalate to partner bank's ombudsman
- RBI complaint for regulated entities

Current Status:
- Major BNPL providers reporting to bureaus
- Late payments affect CIBIL
- Multiple inquiries may impact score

Implication:
BNPL is no longer "invisible debt"
Treat it as seriously as credit card

Step 1: Stop Using BNPL Immediately
Step 2: List All BNPL Dues
Step 3: Prioritize by Due Date
Step 4: Pay Minimums on All
Step 5: Extra to Highest Interest First
Step 6: Consider Consolidation

If Multiple BNPL Debts:
- Personal loan to consolidate
- Lower interest rate
- Single payment
- Clear BNPL accounts

Example:
BNPL Debt: ₹30,000 at 18-24%
Personal Loan: ₹30,000 at 12%
Savings: Significant

Recovery Plan:
Week 1: Full inventory of BNPL debt
Week 2: Set up payment plan
Month 1-3: Pay off all BNPL
Month 4+: Use only if can pay immediately

Travel BNPL:
- Higher limits (ZestMoney)
- Longer EMI options
- Partner with travel sites

Caution:
- Don't travel beyond means
- Interest adds to trip cost
- Set strict repayment plan

No-Cost EMI Approach:
- Good for planned purchases
- Verify it's truly no-cost
- Check if cash discount available

Avoid BNPL For:
- Groceries
- Food delivery
- Utilities
- Regular expenses

Why:
- Creates dependency
- Masks budget problems
- Debt for consumption
- No lasting value

Expected Changes:
- Stricter regulations
- More credit bureau reporting
- Bank integration increasing
- Merchant category restrictions possible

User Impact:
- Better protection
- More scrutiny on approval
- Debt limits more enforced

✓ Yes, If:
- Can pay in full when due
- Using for planned purchase
- 0% interest option
- Tracking all dues
- Good payment history

✗ No, If:
- Can't afford the item
- Already have BNPL debt
- Using for necessities regularly
- History of late payments
- Don't track spending