Buy Now Pay Later (BNPL) – is it worth it?

Qinthara Fasya | 1 November 2021

How does this concept work and is it worth trying out?

Some companies that offer this option includes Atome, Grab, Hoolah and Rely

In 2021, a new payment option known as “Buy Now, Pay Later” (also known as BNPL) began to gain popularity.This option enables customers to purchase the items they desire without worrying about the price at the time. The payments might be made in instalments over a period of months, weeks, or days, or they could be made in such a way that the complete amount is made later. The most appealing aspect of it all, and what distinguishes it from credit card payments, is that there are no interest charges.

While all of this sounds appealing, DigitalCFO Asia investigates if this alternative is secure and dependable in the long run, especially when making several transactions, and whether it will eventually replace credit cards.

The Concept

The concept of breaking up a large purchase into several instalments isn’t new. For a long time, credit cards have offered this through their 0% interest instalment programs. The catch with credit cards is that you must pay a one-time processing charge equal to a percentage of your total transaction amount. If you try to pay up earlier or deactivate the credit card you used to pay, they will charge you an early payment fee.

New BNPL providers such as Atome are non-bank startups that provide comparable services but (apparently) without the strings. We don’t have to pay any processing or early repayment costs. Instead, they generate money by charging transaction fees to their merchant partners.

You must, however, pay each payment on schedule. If you miss a payment on the due date, BNPL suppliers will not hesitate to charge you a late payment fee and suspend your account until you make payment.

Benefits of utilising this option

BNPL is a flexible payment option for customers, particularly Gen Zs and Millennials, that allows them to split their purchases into interest-free delayed payments, which helps them manage their monthly budget and cash flow. BNPL is contactless and can frequently be used through a mobile app/online checkout, making it simple and straightforward to use.

DigitalCFO Asia spoke with Rainal Lu, Atome’s Regional Head of Growth, to get more insights into the benefits of using this relatively newly launched payment option.

Many customers want to get the most out of their rewards and promotions, and Atome makes it possible through their loyalty program, Atome+, coupons, and continuing marketing activities with merchant partners. For businesses, BNPL helps businesses reach out to digital-savvy consumers, increase customer conversions, increase basket size and improve customer experience. Retail partners see an average 30% increase in ticket order size and overall sales since adding Atome as a payment checkout option.

Sephora, Agoda, ZALORA, SHEIN, Zara, Marks & Spencer, Charles & Keith, Aldo, and Pandora are among the marketplaces (nine) and merchants (5,000+) with the most extensive presence. This makes it easier for merchants to decrease go-to-market complexity and grow relationships from one market to the next.

Risks involved in this payment concept

Because BNPL is a novel idea, many customers and stakeholders may be unfamiliar with how it works and the benefits it provides to companies and consumers.

Users are drawn to BNPL because of its zero-interest financing, but in order to avoid paying interest or fees, consumers must adhere to specific requirements, such as paying on time and in full. Therefore, users must ensure that they are disciplined and diligent and making timely payments to avoid having to pay extra payments. Late payments may also lead to a suspension of the user’s accounts as well.

According to McKinsey, shoppers tend to spend more per purchase when they utilise BNPL. This is primarily due to the appealingly cheap amount customers must pay on the first instalment when contrasted to the full price. Due to this, users may spend uncontrollably, as they won’t have to pay as much upfront.

BNPL is great for users with a stable monthly income. Those that don’t may need to be extra cautious while using BNPL in order to guarantee that they have enough for the following payment cycle.


In hindsight, BNPL is a very useful payment method for those who take note of their monthly spendings closely. With the upcoming gifting and Christmas period, users must be aware of their purchases, as BNPL purchases when stacked up with other purchases, may be messy to deal with.

From a retail industry point of view, Q4 is a really important shopping season and hopefully can nurse a gradual recovery in retail sales and jobs, and overall economic activity.

Rainal Lu, Regional Head of Growth for Atome