Significance Of KYC For Buy Now Pay Later (BNPL) In India
Want to know what is the significance of BNPL in India? Check out this guide to know the steps to do KYC online for buy now pay later & find out its importance!
The BNPL concept, which involves no interest and no additional charges payment model, is forecasted to become an extensively accessible financial instrument globally.
The BNPL full form is Buy Now Pay Later, a precise payment structure now popular amongst digital shoppers, particularly in the younger audiences within the pandemic.
The Buy Now Pay Later Apps make it simpler for people to make purchases, and many retailers have partnered with these applications to further facilitate their business. These BNPL apps are like credit cards as they enable you to purchase products today then pay for them digitally over time.
One of the significant differences between BNPL apps and credit cards is that most of these applications do not charge any added or extra interest as long as you make the payments regularly.
How To Do KYC Online to Enable Buy Now Pay Later (BNPL) Financial Scheme
BNPL is a no-cost financing scheme with an easy and supple repayment schedule, supported with a quick KYC check and KYC verification done online.
As a 100% online solution, BNPL enables a quick one-click checkout procedure. To facilitate the BNPL services, the purchaser must quickly sign-up once at checkout and can further leverage the BNPL-based app services when shopping across merchant web portals.
Anyone sitting in any part of the nation can sign up and use BNPL services. On the other hand, Credit Cards need more time for approvals and involve added paperwork.
So, with a swift online KYC enabling BNPL, one can get instantaneously approved confirmation and initiate transacting with a straightforward sign-up procedure.
With CKYC (Central Know Your Customers) or eKYC (Electronic Know Your Customers), identification and user registration have become more upfront. The eKYC means and involves a paperless registration procedure that reduces the costs and out-of-date bureaucracy needed in KYC processes.
Digital KYC Validation and Verification for BNPL Model
For the young who don't have access to credit cards, this Buy Now Pay Later (BNPL) model provides simple access to credit for small-sized purchases. As we discussed above, a first-time purchaser will have to complete an online KYC and digitally validate on the service provider's platform.
BNPL services providers use data sets and analytics to get information on purchasers' buying behavior and explicit creditworthiness. Your social media activities are even considered for KYC validation and verification while evaluating your creditworthiness.
BNPL vs. Credit Card
A Buy Now Pay Later (BNPL) model is leveraged merely with a partner merchant, online or offline. However, you can universally utilize a credit card with any registered business that readily agrees to it as a model for payment, with the user base getting an interest-free period.
You could even make direct fund withdrawals from your credit card, which is not applicable with a BNPL payment model. The credit card fund limits may be much superior when matched to BNPL.
If you do not have steady pay or a good credit score, you will have difficulty utilising or getting access to most credit cards. Also, credit card dues entice interests. On premium-based credit cards, you even pay onboarding and periodic renewal fees.
So, for anyone not meeting the stringent suitability norms for credit cards, the BNPL model offers a way out. Most of the end-consumers can get the BNPL services straightforwardly.
BNPL comes with stress-free loan entitlement and flexible industry standards when matched to other financial options in the existing marketplace.
What companies should know about identity verification
BNPL companies can leverage identity verification services for validating the identities of their customers. There are many times when the identities of users need to be confirmed. These include:
- During the customer onboarding process
- During an expensive acquisition
- During an address change process
- During affordability checks to make sure users are not spending more than their means
Identity verification also prevents fraud and phishing attacks. These threats drive down the trust in the BNPL industry. By confirming compliance with necessary regulations and reducing the likelihood of identity fraud, identity verification can help BNPL enterprises build consumer trust.
BNPL Payments - Projected to be Repaid in Quick Time
In most industry use cases, the BNPL does not entice interest. However, you are required to repay your dues in the defined interest-free window. A failure to do so will lead to late payment penalties and added charges.
BNPL does not customarily involve tough credit inquiries. However, late payments will be entered into your credit history, negatively impacting your existing credit score. Consequently, always repay your payment dues on time, no matter how small-sized.
How HyperVerge Video KYC can Assist in BNPL-related Applications
The HyperVerge Video KYC solution relies on the RE's domain as per precise regulation and backs all customer requirements. The company leverages explicit Artificial Intelligence (AI) engines to enhance the KYC procedure and make it robust.
At HyperVerge, we assist with Offline Aadhaar XML support for customer validation and verification for facilitating compliance as an integral part of the dynamic workflow.
Customer location tracking and timestamp features are entrenched in the video KYC process. Location is specifically cross-checked to be within India as per defined regulation. Furthermore, the customer's image with PAN is better cross-checked for precision, and PAN information is validated against the NSDL database.
Superior Artificial Intelligence (AI) driven OCR are leveraged to read and match ID card details and all supported PAN card setups. Instantaneous liveness check of the customer is enabled, and submitted documents are cross-checked in real-time without any legal verification compromise.
Finally, Artificial Intelligence based face match cross-check the customer photograph along with Aadhaar and PAN photograph through complete precision, and this step completes the effortless video KYC procedure.
The Way Forward: KYC for BNPL
HyperVerge has empowered organizations to securely authenticate a large user base over time with quick onboarding while ensuring complete safety against any fraudulent activities.
Video KYC by HyperVerge is a vital step forward in bringing enterprise clients and their end-customer base closer, and the best use case is KYC for BNPL.
Would you like more information about the HyperVerge Video KYC Product and how you can set it in your existing and future workflow? If so, directly write to us at firstname.lastname@example.org. Else swiftly fill out our request form right here.