HOW EQUATED MONTHLY INSTALMENT (EMI) SCHEMES AND BUY NOW, PAY LATER (BNPL) SERVICES FUEL IMPULSIVE BUYING: A CLOSER LOOK AT CONSUMER BEHAVIOUR

An Equated Monthly Instalment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. The EMI consists of both the principal amount and the interest on the loan, which is spread over a predetermined period. EMIs are commonly used in home loans, personal loans, and auto loans, where the borrower repays the loan in regular instalments over time. Credit card companies typically offer this facility, but nowadays, it is also available with debit cards. Many banks are now providing a pre-approved credit limit for their debit card holders as well. BNPL stands for "Buy Now, Pay Later". It is a payment option that allows consumers to purchase goods and services and pay for them later, typically with no interest or fees. BNPL schemes offer customers the convenience of paying for purchases over time, without needing a credit card or traditional loan. This payment option has become increasingly popular among consumers, particularly among younger generations, to manage their finances and make larger purchases more affordable. However, it also has potential drawbacks, such as higher spending and risks of missed payments, that should be considered before utilizing this payment option. The objective of this study is to examine the factors that motivate consumers to choose EMI schemes and BNPL services as payment options, and to evaluate their perceived advantages and the risks associated with them. The study primarily relied on primary data collected from 100 samples using convenient sampling, along with secondary sources such as published research reports on BNPL.