What is Buy Now Pay Later? How BNPL works in India

You’ve probably seen it happen at your store or website. A customer loves a product, spends time comparing options, adds it to the cart and then pauses at the final amount. They’re interested, they want it, but the full payment today feels a bit tight. That split-second hesitation is often where a sale is won or lost.

Now imagine that same moment with a simple option in front of them: Buy Now Pay Later (BNPL). Suddenly, the decision becomes easier. They can take the product home today and pay for it in manageable EMIs over the next few weeks or months.

For you, it means higher conversions, bigger baskets and happier customers. That’s why BNPL has quickly become one of India’s most preferred checkout choices. In this blog, we break down how it works and what it means for your business.

What is Buy Now Pay Later?

Buy Now Pay Later is a payment option that lets customers purchase something today and pay for it later, either at once or through EMIs spread across weeks or months. It’s simple, fast and ideal for customers who want flexibility without a traditional loan process.

With Pine Labs PoS terminals and payment gateway, businesses can offer BNPL both online and in-store. The experience feels the same everywhere: smooth checkout, instant approval and predictable EMIs.

BNPL has existed in small pockets for years, but the rise of online shopping has made it mainstream. Today, Indians use it for everything from fashion and gadgets to furniture and home appliances because EMIs make bigger products easier to afford.

What really happens when someone selects BNPL

BNPL journeys are built to be quick because customers often decide at checkout. Here’s how the flow typically works:

Step 1: Choose BNPL at checkout

Whether on an app, website or in-store PoS, customers simply select BNPL as their payment method, right alongside cards, UPI or wallets.

Step 2: Select a repayment plan

Customers pick a repayment duration, usually 3 to 24 months. Many BNPL plans also offer interest-free EMIs if paid within the specified timeline.

Step 3: Instant approval

BNPL approvals are designed to be fast. Instead of paperwork or lengthy credit checks, the system evaluates basic customer information and purchase history. Approval takes seconds.

Step 4: Repay in EMIs

Repayments occur on the due date, either automatically or through UPI, debit card or online banking. Customers can track EMIs across different stores using the same BNPL provider.

Step 5: Late fees if payments are missed

If the Buy Now Pay Later EMI isn’t paid on time, late fees or interest may apply. Some BNPL providers offer a short grace period or let customers defer a payment for a fee.

How BNPL lifts conversions and makes buying feel easier

Buy Now Pay Later benefits businesses and consumers differently and strongly.

For businesses

1. Higher conversions: BNPL makes higher-priced products feel more achievable, reducing cart drops
2. Lower acquisition costs: Customers actively look for flexible payments, attracting organic traffic
3. Stay competitive: Offering BNPL keeps your pricing attractive versus brands that don’t provide EMIs
4. More revenue: BNPL often increases average order value and repeat purchases
5. Flexible offers: With Pine Labs, merchants can run no-cost EMIs, cashback or bundled offers easily
6. Faster settlements: With T+1 settlement, merchants get their money even when customers pay later

For customers

1. Convenience & flexibility: BNPL spreads payments across months without needing a credit card
2. Instant approval: Easy sign-up, minimal documentation and quick decisions
3. Interest-free EMIs: In many cases, customers pay the exact product price with no extra cost
4. Improved purchasing power: Shoppers can buy essentials or upgrades without stretching their budget
5. Transparent charges: Clear terms help customers plan EMIs confidently

What makes BNPL so appealing to everyday buyers

BNPL has quietly become one of those features customers expect without saying it out loud. They may not ask for it directly, but the moment they see flexible EMIs at checkout, their comfort level rises and the chance of completing that purchase increases. For you, this means fewer dropped carts, smoother conversations at the counter and a steady lift in overall sales without changing your pricing.

The real urgency comes from how quickly customers shift to stores that offer easier payment options. If your competitors enable BNPL first, they will capture the intent that could have been yours. Adding BNPL now ensures you stay relevant, compelling and conversion-ready across every channel.

Start exploring Pine Labs BNPL solutions at https://www.pinelabs.com/