The financial landscape in the Philippines is evolving rapidly, driven by a surge in digitalization and changing consumer preferences. One significant trend that has gained momentum in recent years is the emergence of Buy Now, Pay Later (BNPL) apps. These innovative financial tools allow consumers to make purchases even when they are short on cash, with the flexibility of paying for their chosen products over time.
In this article, we will delve deep into the world of Buy Now, Pay Later apps in the Philippines, exploring their mechanisms, advantages, drawbacks, and the best options available.
The Promising Future of Buy Now, Pay Later
The Buy Now, Pay Later industry in the Philippines is on the brink of substantial growth. A notable forecast predicts that the size of the BNPL market will significantly expand by 2026, potentially reaching millions of consumers. This surge is primarily attributed to the accelerated adoption of cashless services spurred by the global pandemic. As more Filipinos embrace online shopping and seek convenient financing solutions, BNPL apps have emerged as a compelling option.
Expanding Use Cases
Traditionally, BNPL services were primarily associated with substantial purchases, such as appliances or electronics. However, an interesting shift has occurred as more individuals now employ these services for everyday essentials like groceries, clothing, and even dining out. This article aims to provide you with a comprehensive understanding of how BNPL functions, its benefits, and potential pitfalls, enabling you to make informed decisions about when and how to use these apps.
Demystifying Buy Now, Pay Later
What is Buy Now, Pay Later?
In the Philippines, Buy Now, Pay Later (BNPL), sometimes referred to as Shop/Loan Now, Pay Later, is essentially an installment loan system that enables consumers to postpone payment for their online transactions. This payment option allows you to make a purchase immediately, even if you currently lack the necessary funds. It’s a flexible solution for individuals who want to acquire products or services without paying the full amount upfront.
How Do Buy Now, Pay Later Apps Operate?
When making online purchases, you are typically presented with payment options like credit cards, debit cards, or cash on delivery (COD). However, many retailers now offer a BNPL option. Choosing BNPL allows you to acquire the desired product without an immediate cash outlay. It’s important to note that you will be required to repay the amount by an agreed-upon date, and if you opt for installments, the payment will be divided over the specified number of months. In essence, BNPL is akin to a loan that permits you to make purchases without relying on a credit card.
BNPL apps have streamlined the application process, making it easy for consumers to access this financing option. Typically, users need to download the app, provide necessary identification, and undergo a credit assessment. Once approved, they can start shopping and using BNPL for their transactions.
Advantages of Buy Now, Pay Later Plans
Flexible Installment Plans
One of the standout advantages of BNPL is the flexibility it offers. Many BNPL providers extend installment plans ranging from a few months to as long as 24 months. This is particularly beneficial for those considering major purchases, such as appliances, laptops, smartphones, and other personal gadgets. It allows you to break down the cost into manageable monthly payments, making it easier on your budget.
0% Interest Installments
Several BNPL brands provide interest-free installment loans, making it a practical alternative to credit cards, where additional fees often accompany the principal loan amount. This interest-free feature can significantly reduce the overall cost of your purchase. However, it’s important to read the terms and conditions carefully, as not all transactions may qualify for 0% interest.
Ideal for Urgent Purchases
BNPL can be a lifesaver when you urgently need to replace a broken laptop, repair your car, or handle unforeseen medical expenses. It offers immediate access to the products or services you require, even if your paycheck is a few weeks away. This can provide peace of mind in emergencies and prevent you from resorting to high-interest loans or credit cards.
Suitable for Offline Purchases
An often-overlooked feature of BNPL apps is their usability for offline shopping. Your smartphone effectively functions as a credit card, enabling you to make in-store purchases with ease. This versatility allows you to use BNPL for a wide range of expenses, from groceries at your local supermarket to furniture at a brick-and-mortar store.
No Collateral Required
Unlike secured loans, BNPL programs are unsecured, meaning you don’t need to pledge any assets for loan approval and disbursement. This removes the burden of collateralization from the equation, making BNPL accessible to a broader segment of the population. Whether you’re a student, a young professional, or someone without significant assets, you can still benefit from BNPL services.
Disadvantages of Buy Now, Pay Later
A common pitfall associated with BNPL is the temptation it poses to make impulse purchases. Similar to credit cards, BNPL can create a false sense of financial security, leading individuals to overspend and accumulate debt. The ease of making purchases without immediate payment can lure consumers into buying items they don’t necessarily need or can’t afford.
To avoid this trap, it’s crucial to exercise discipline and use BNPL apps responsibly. Consider whether the purchase is a necessity or a luxury, and only use BNPL for essential expenses or planned purchases.
Multiple BNPL Accounts
With numerous BNPL apps available in the Philippines, some individuals may be enticed to download multiple apps and create multiple accounts. While this may seem like a way to access more credit, it can quickly lead to financial mismanagement. Managing multiple accounts can become overwhelming, making it difficult to keep track of due dates and repayment schedules.
To prevent this, choose one or two trusted BNPL apps that align with your financial goals and needs. Having a clear overview of your obligations will help you maintain control over your finances.
BNPL services are, in essence, installment loans, and they typically come with interest charges. Interest rates may start as low as 1% per month, adding extra costs to your purchases. While some transactions may offer 0% interest, this is not always the case. To fully understand the financial implications of your BNPL transactions, review the terms, especially the interest rates and associated fees.
Late Payment and Transaction Fees
Failure to repay your BNPL loan by the due date often results in late payment fees, which can be substantial. Some companies may charge a daily fee for each day the loan remains unpaid. Additionally, transaction fees or loan processing fees might also apply. These fees can quickly accumulate and impact your overall financial well-being.
To avoid these fees, always make payments on time and be aware of the terms and conditions of your chosen BNPL app. Setting up reminders or automatic payments can help you stay on top of your obligations.
15+ Best Buy Now, Pay Later Apps in the Philippines (2023)
Now that we have a solid grasp of how BNPL works and its pros and cons, let’s delve into the best BNPL apps available in the Philippines. These apps offer a range of features, including varying credit limits, payment terms, and partner merchants.
1. PayMaya Pay Later
PayMaya is a well-known mobile wallet in the Philippines, and it has introduced its own BNPL feature, PayMaya Pay Later. This service allows users to pay for their online purchases within a specific timeframe without incurring interest charges. The exact payment terms depend on the transaction and are provided during the checkout process.
PayMaya Pay Later covers a wide array of online merchants, including Lazada, Zalora, Agoda, and many more. This flexibility makes it a convenient choice for various types of purchases.
Afterpay is a global BNPL provider that has made its way to the Philippines. With Afterpay, you can shop at partnered stores and pay for your purchases in four equal installments over six weeks. The best part is that Afterpay charges zero interest on your transactions, making it a cost-effective option for those seeking financial flexibility.
3. GrabPay Later
Grab, a leading ride-hailing and food delivery app in the Philippines, offers GrabPay Later as an extension of its services. This BNPL solution allows users to shop online, including on GrabMart, and defer payment to a later date. The repayment terms vary, so it’s essential to check the specific terms for each transaction.
GrabPay Later is particularly attractive to users who are already familiar with the Grab ecosystem. It’s a convenient way to finance various needs while leveraging the ease of using a single app for multiple services.
TendoPay is an independent BNPL app that collaborates with a wide range of merchants, both online and offline. It provides loan terms from 15 days to 24 months, with interest rates starting from as low as 0%. TendoPay is an excellent choice for those looking for flexibility in loan duration and competitive interest rates.
Akulaku is another popular BNPL app in the Philippines, offering a wide range of installment options for online shopping. Loan amounts can range from ₱2,000 to ₱40,000, with loan terms spanning from two to 24 months, and a fixed interest rate of 3.49% per month.
6. Cashalo PayLater
Cashalo is a popular fintech brand in the Philippines that promotes financial inclusion. It offers installment loans with various partner stores, including Robinsons Department Store, FC Home Center, Fila, World Balance, DiviMart, and more. Loan amounts can go up to ₱2,000, with payments due every month. The best part? You pay 0% interest when you pay on time.
7. CLiQQ Loans
CLiQQ Loans allow you to add credits to your CLiQQ Wallet for purchases at 7-Eleven or CliQQ Grocery. CLiQQ partners with digital loan providers such as TendoPay, Venio, Lendpinoy, and Plentina. The loan terms, interest rates, and fees depend on your chosen CLiQQ loan partner.
8. Shopee SPayLater
SPayLater, offered by Shopee, allows customers to buy now and pay later or get an installment loan. It covers various products, but voucher items and intangible digital products are exempt. SPayLater bills can be settled through ShopeePay and other supported methods, including e-wallets, online payments, and over-the-counter.
Atome is a Buy Now, Pay Later app ideal for fashion enthusiasts. It splits your bill into three equal payments over three months, all with a 0% interest rate. If you miss a payment, a one-time administration fee of ₱300 applies. Atome partners with brands like ZALORA, Aldo, Garmin, HairMNL, and more.
10. Home Credit
Home Credit is a well-established player in the BNPL space in the Philippines. It provides access to a wide range of products, from mobile phones and electronics to furniture, appliances, and even musical instruments. The application process is fast and easy, typically requiring only two valid IDs for approval.
Plentina offers small loans starting at ₱100 for everyday purchases, particularly groceries. Loan offers increase with consistent usage, demonstrating responsible borrowing. Plentina charges a service fee, which varies depending on the repayment period. Paying within 14 days eliminates the service fee, but it can reach up to 14% if your payment is 60 days late.
GCredit, integrated into GCash, offers a personal credit line for verified users with high GScores. It doesn’t require collateral or a guarantor. Loan amounts can go up to ₱30,000, with a 45-day repayment term. Interest rates range from 5% to 7% per month, and late payment fees are tiered based on the number of days overdue.
GGives, another GCash offering, provides installment loans powered by Fuse, a GCash subsidiary. Unlike GCredit, GGives permits only one active loan at a time. Loan amounts can reach ₱125,000, with repayment terms extending up to 24 months. Interest rates vary from 0% to 5.49%, and late payment fees apply.
JuanHand targets underserved borrowers, including those in provinces and workers such as tricycle drivers. It simplifies borrowing with a streamlined application process that requires only one valid ID. JuanHand does not assess borrowers based on their credit history, making it an attractive option for those with unfavorable credit backgrounds.
15. Digido Quick Loans
Digido Quick Loans is an online lending platform offering loan amounts from ₱1,000 to ₱25,000. First-time borrowers can benefit from a 0% interest rate, while regular rates can go up to 11.7% per month. The platform stands out for its quick approval process, often providing same-day approval.
16. Tonik Shop Installment Loan
Tonik Shop Installment Loan targets substantial purchases, such as appliances and electronics. Loan amounts can reach ₱100,000, and you can purchase up to three items with one loan. The application process is streamlined, requiring only one valid ID. A 10% minimum down payment may apply.
Repaying Installment Loans
The method of repaying installment loans can vary depending on the BNPL app you choose. However, many of them offer similar repayment channels. Borrowers can often make payments through the following channels:
- Bayad Center
- Cebuana Lhuillier
- Bank transfers
These multiple payment options add to the convenience and accessibility of BNPL services. You can choose the channel that suits you best, whether it’s a digital wallet, over-the-counter payment, or a bank transfer.
Buy Now, Pay Later apps have become powerful financial tools in the Philippines, offering consumers a convenient way to make purchases and manage their expenses. However, they come with their own set of advantages and disadvantages.
It’s essential to use BNPL apps responsibly, ensuring that you don’t fall into the trap of impulsive spending or accumulate unnecessary debt. Always read the terms and conditions, be aware of interest rates and fees, and make payments on time to avoid penalties.
Before choosing a BNPL app, consider your financial needs and preferences. Each app has its own unique features, partner merchants, and loan terms. Select the one that aligns best with your lifestyle and purchasing habits.
As the BNPL industry continues to grow, it’s crucial to stay informed about the latest developments and changes in the market. Keeping up to date will help you make informed decisions and harness the benefits of BNPL apps while avoiding potential pitfalls.
Ultimately, whether you’re buying a new smartphone, paying for groceries, or making a significant home appliance purchase, Buy Now, Pay Later apps in the Philippines offer a flexible and accessible way to manage your finances and achieve your goals. However, like any financial tool, they are most effective when used wisely and responsibly.
In the meantime, if you require larger loan amounts to finance substantial expenditures, it might be prudent to explore the option of a personal loan. You can evaluate your choices and submit your application via CashLoanPH.com:
|Loan Provider||Loan Amount Range||Monthly Add-on Rate||Minimum Annual Income||Approval Time|
|Tala Loan||₱1,000 - ₱15,000||15%||None||24 hours|
|Tonik Quick Loan||₱5,000 - ₱50,000||Starts at 4.26%||₱180,000||As fast as 1 hour|
|RFC Loan||₱10,000 - ₱150,000||4%||₱120,000||As fast as 24 hours|
|UNO Digital Bank Personal Loan||₱10,000 - ₱200,000||1.79%||₱180,000||1-2 days|
|HSBC Personal Loan||₱30,000 - ₱500,000||0.65%||₱168,000||5 to 7 banking days|
|CTBC Bank Personal Loan||₱500,000 - ₱2 million||1.39% to 1.79%||₱180,000||1 to 5 banking days|
|PSBank Personal Loan||₱20,000 - ₱250,000||1.75% or 2.5%||₱180,000||5 to 9 banking days|
|UnionBank Personal Loan||₱20,000 - ₱2 million||1.29%||₱250,000||24 hours|
|CIMB Personal Loan||₱30,000 - ₱1 million||1.95%||₱180,000||As fast as 24 hours|
|Tonik Flex Loan||₱20,000 - ₱250,000||Starts at 1.7%||₱180,000||1 banking day|
|Tonik Big Loan||₱250,000 - ₱5 million||0.5825%||None||7 days|
|SB Finance Personal Loan||₱30,000 - ₱2 million||2%||₱180,000||5 banking days|
|Maybank Personal Loan||₱50,000 - ₱1 million||1.3%||₱300,000||5 to 10 banking days|
|RCBC Bank Personal Loan||₱50,000 - ₱1 million||1.3%||₱360,000||5 to 7 banking days|
|BPI Personal Loan||₱20,000 - ₱2 million||1.2%||₱300,000||5 to 7 banking days|
|Metrobank Personal Loan||₱20,000 - ₱1 million||1.25% to 1.75%||₱350,000||7 days|
|Tonik Quick Loan||₱5,000 - ₱50,000||Starts at 4.26%||₱180,000||As fast as 1 hour|