Two in three Filipinos who have heard of buy now, pay later services have used it in the past year. That’s according to a recent TransUnion study. It’s an increase from their previous year’s research of roughly one in two Filipinos.
The statistic is clear: buy now, pay later is a growing wave in the local economy. It’s transformed plenty of traditional transactions from one-off payments into multi-month obligations. It’s also empowered hundreds of thousands of users nationwide with a spending ability they wouldn’t have had access to.
If you want to remain ahead of the curve or simply educate yourself on the history of buy now, pay later in the Philippines, then keep reading. This article explains how buy now, pay later services grew in the Philippines and the benefits it’s brought customers along the way.
The Rise of Buy Now Pay Later in the Philippines
Before buy now, pay later services became popular, Filipinos relied primarily on traditional financing methods. These included credit cards, personal loans, and informal lending. Even then, some of these options were still inaccessible to many.
The underbanked population often struggled to qualify for a loan, let alone a credit card. Informal lending would usually have unreasonable interest rates attached to them.
Fortunately, things are changing. Recent numbers from the Senate Economic Planning Office (SEPO) of the Philippines, the number of underbanked Filipino adults in 2021 reached 34.3 million, a positive change from 51.2 million in 2019.
The rise of buy now, pay later services can easily be a reason why more Filipinos are getting comfortable with money. A study forecasted buy now, pay later sales to surge to over 170% in 2024.
Atome is a leading brand among buy now, pay later providers in the Philippines. It offers its customers the Atome Card, a pay-later card that grants users with spending limits of up to ₱200,000 and the ability to split their card payment into installments of up to 6 months.
But to better appreciate the evident rise in buy now, pay later in the Philippines, it’s crucial to first understand how the model works in the first place.
How Does Buy Now Pay Later Work?
What makes buy now, pay later services so attractive to Filipino customers? The open secret lies in how it operates. Here are its three main components.
Assessing the user
When you sign up for buy now, pay later services, they conduct comprehensive checks in the background to determine your creditworthiness and how much spending limit to assign you. These are done to manage the provider’s risk by assigning you with a certain spending limit, ensuring that you’re the type of user who can repay it easily.
Financing the purchase
Once the buy now, pay later provider has accepted your application and assigned you a certain spending limit, you’re now able to use it for your various purchases.
Suppose there is an item you want to buy, such as an air conditioner for your home. You can think of the buy now, pay later service as a short-term loan provider, giving you the money you need to pay for the big ticket item.
Processing the transaction
This is where the buy now, pay later service shines. While merchants will ask you to pay them for the entirety of the cost of a product, pay-later services will allow you to split the payment into multiple monthly installments. In Atome’s case, you can split your card’s bill into 3 or 6 easy monthly installments.
Buy now, pay later services will ask you to pay an additional percentage of the installments as interest. However, with Atome, if you repay what you owe within 40 days, you won’t be charged with interest. That’s why plenty of users use it over others.
3 Benefits of Buy Now Pay Later Services
Buy now, pay later services are more than just another financial trend. It offers real-world benefits to its approved users. Below are just some of the advantages that users can enjoy.
1. Offers financial flexibility
Unlike credit cards that may have stringent approval processes and high interest rates, buy now, pay later services such as Atome Card allow users to make purchases and spread payments over time without incurring interest if paid within a specified period.
This flexibility empowers you to manage their cash flow more effectively, making larger purchases feasible without immediate financial strain.
2. Allows you to manage your budget much easier
This feature is particularly appealing to consumers who prefer predictable payment plans over lump-sum payments. By breaking down payments into smaller chunks over several months, you can budget more effectively, aligning expenditures with their income streams.
This approach not only enhances financial planning but also reduces the likelihood of impulse spending, promoting more responsible financial habits among users.
3. Increases your spending power
The number of items you buy expands tremendously once you have access to a trustworthy buy now, pay later service such as Atome. Since you can now make repayments over 3 to 6 months, you don’t have to worry as much about having all the money you need upfront to pay for your wants and, especially, your needs, such as a much-needed grocery trip or an item you need in case of an emergency.
Level Up Your Finances with Atome Card
The buy now, pay later model is a new way of paying that’s empowering more and more Filipinos with an assigned spending limit. Its quick rise these recent years indicates an expansive demand among the country’s population for financial accessibility.
If you’re interested in joining the growing number of Filipinos taking advantage of this service, consider applying for your own Atome Card today! The process takes 90 seconds and you can be approved instantly! Just scan the QR code to get started.
