The dark side of Buy Now, Pay Later

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Editor's note: Is there anything quite as seductive as the phrase “buy now, pay later”? Ever since online shopping became a pandemic-induced pastime, BNPL companies in India have multiplied, as have its users. And while credit—as a tool—is important for our collective financial growth, the rise of BNPL, especially among the millennial and Gen-Z demographics, indicates that there’s very little awareness about the dangers of casual debt. And that’s what today’s newsletter is about. BNPL may promise you convenience—but at what cost? Red flag 1: The easier the process, the bigger the catch  Perhaps the biggest red flag for BNPL is how easy it is to get approvals for a BNPL credit limit. The bulk of BNPL providers do not check credit scores and instead rely on the user providing them data about their salary and employment. I registered for an account with one of the more popular BNPL providers last week. The process took me about 5 minutes. I had to give my PAN card number and my salary/employment details (I gave them an arbit post-tax salary figure of Rs 1 …