As a payment method that’s taking off around the world, Buy Now Pay Later, or BNPL, is gaining ground in becoming the preferred payment method for Millennials and Gen Zs. Whether shopping in-store or online, BNPL services like hoolah allows consumers to split their purchases into three monthly interest-free repayments.

Source: hoolah

If you’re someone hearing about Buy Now Pay Later for the first time - a platform that helps consumers spend responsibly without profiting from them sounds a little too good to be true. As a relatively new form of payment in Malaysia, it is only natural for people to misinterpret and make judgements based on surface-level knowledge.

Let’s dive deeper into some of the common misconceptions around BNPL and hoolah’s approach to debunking these myths.

Myth or Fact?

While there are misconceptions surrounding the concept of BNPL, it is first important to note that not all BNPL services are the same. While there are businesses that label themselves as BNPL providers, some of these are lending businesses that allow consumers to make borrowed payments at a later date.

BNPL specifically refers to platforms like hoolah, that gives consumers access to the things they need now, and pay later via three monthly, interest-free repayments. In addition, consumers can manage their personal cash flow and monthly budgeting by breaking it down into bite-sized monthly repayments.

The best part? You can utilise BNPL with a debit card to better control your spending - it’s a great alternative for consumers who have no access to credit cards, yet want to enjoy installment-based payments.

Myth: Interest fees are the main revenue driver of BNPL - similar to the credit card model. 

This is not the case for hoolah, as the revenue comes from the merchants, and not the consumers. When using BNPL, simply ensure that you make your repayments in a timely manner to avoid late fees. hoolah prides itself on transparency - zero interest, no processing fees, no hidden fees, and a very clear view on your upcoming repayments. You can also opt to make early payments without any additional charges, should your cash flow for the month allow.

Myth: BNPL encourages overconsumption.

On the surface level, BNPL is perceived to give a false sense of affordability that encourages people to spend more than they can afford due to its instalment format. However, it’s interesting to note that on the contrary, consumers are using BNPL and moving away from fast consumption to make better quality purchases. A recent survey revealed that 72.6% of consumers agreed that BNPL has allowed them to buy products that are of higher quality that can last them a long time, rather than making frequent repurchases of lower-quality products. 

What this means is that BNPL can help consumers make responsible and sustainable purchasing decisions - buying fewer, but better quality products, while reducing waste and the impact of their purchases on the environment, and of course, financially by alleviating their cash flow for the month.

Responsible Affordability with hoolah

hoolah places a strong emphasis on their motto of “Responsible Affordability” - it is part of their vision since day one of the business. They’re also invested heavily in delivering financial literacy to consumers. Having this knowledge and education instilled in their users is the first and a vital step to nurture responsible spending. Plus, when a hoolah user hits their spending limit, the platform automatically rejects transactions from being processed, deterring spending beyond their means.

As we have uncovered, hoolah values transparency, helps consumers spend responsibly, and encourages quality, sustainable purchasing decisions. With proper education and responsible usage, hoolah is intended to help consumers like ourselves reduce the impact of price, and ultimately with cash flow management and monthly budgeting.

Now that we’ve shared the ways hoolah is promoting responsible affordability, here are some budgeting tips to help you stay ahead in your financial journey.

Budgeting tips from hoolah

Keep track of your expenses

Staying in control of your budget means having clarity on where your money is going automatically (and silently) each month. Make a habit of recording your expenses via a mobile app, or even your notes or an excel sheet and sorting them under categories like ‘Transport’, ‘Food’, ‘Entertainment’. This helps you to keep track of where your money goes and having this overview is great to spot unnecessary expenses that you might be able to cut down on.

Don’t forget to include things like monthly subscriptions such as Spotify or Netflix. While these expenses seem seemingly insignificant at the moment of purchase, it could really add up annually - especially if you’re not actively using their services.

Set monthly saving goals

Create a monthly goal that you would like to achieve by the end of every month. Having this number in mind will encourage you to make smarter choices. Be mindful in setting a realistic goal to save up monthly and do your best to stick to it. While some people find the 50/30/20 rule effective, it’s best to adjust accordingly to what suits your lifestyle or your needs for the month.

  • 50% spent on needs (food, transport, home loan repayments, electricity bills etc)

  • 30% spent on wants (Gym memberships, going to the movies, dining out etc)

  • 20% set aside as savings

That isn’t to say that you can’t enjoy the nice things in life too when you’re trying to stick to a budget, which brings us to the next point.

Avoid saver’s burnout

At hoolah, we believe it’s okay to treat yourself now and then, as long as you’re doing it in a responsible manner. Remember to set little rewards here and there for being so disciplined and that will make the entire process more sustainable and rewarding for yourself.

Say no to impulse shopping

Shop with intention and never with impulse. Before you commit to an impulse purchase, ask yourself if you really need this item right now. Give it a couple of days and if you find yourself still thinking about it, then come back to it and buy the item. Plus, you can look for cheaper alternatives or special promotions online - you’ll be surprised to find the same item, but for cheaper elsewhere!

Now, with a better understanding of BNPL and these nifty budgeting tips, you can take charge of your finances and use hoolah to manage your monthly cash flow and empower your lifestyle. Remember, financial literacy is a lifelong journey of learning and adapting to your needs. Get the things you want and need today via hoolah’s Buy Now, Pay Later service. For more information, log onto hoolah.co or download the hoolah mobile app on Apple Store and Google Play Store.