In the age of digital transactions, the internet, and payment wallets like Google Pay and Apple Pay, "Buy Now, Pay Later" (BNPL) platforms have absolutely exploded.
20 years ago, if you went into a merchant and wanted to pay for a $20 item in 10 monthly instalments, they'd likely decline. Now? It's becoming the norm.
Is it the best way to manage your finances? That isn't really for us to say in this article. We're going to dive into an extensive review on Paybright, a company that is continuing to capture pieces of the BNPL market share.
PayBright review 2022 - What exactly is PayBright?
PayBright is an emerging fintech company started in 2009 that aims to allow consumers to break down the cost of a particular purchase into a series of biweekly or monthly instalments.
Customers can decide whether or not they want to make interest-free payments over two months (paid biweekly) or payment plans that could still be interest-free but potentially carry interest charges over 6 to 60 months.
The company won Canadian FinTech Company of the Year in 2019 and already has over $1.5B in approved consumer spending power. Its platform is becoming increasingly popular, as over 7,000 merchants have signed up to allow its BNPL features.
In early 2021, Affirm, an instalment loan provider in the United States, bought PayBright for $340M.
How does PayBright work?
The process of utilizing PayBright is simple. I've used an example below from Casper, a mattress company and one that is an official merchant of PayBright.
As you can see, when you select the option to buy now and pay later, Casper gives you the potential financing details, and from there, it says select PayBright at checkout.
Fortunately, it is that simple. As you can see below, Casper can select PayBright directly on their checkout screen.
From here, you'll sign up for a PayBright account, and once you're inside, you'll be able to choose from your current instalment options.
In terms of the functionality behind how the merchant receives their money with PayBright, they will get it right away. PayBright charges its merchants to have access to its features, and as a result, it bears most of the risk regarding the product.
If you buy an $800 iPad, PayBright will pay Apple in full for the product and then ship it to you when you've paid the first instalment. It takes on the risk of future payments not being made.
What stores use PayBright?
The company has over 7000 merchants that utilize its payment plans. So, I went to their website and will note the most popular ones:
- The Bay
- Browns Shoes
- The Source
- Steve Madden
- Moose Knuckles
- Urban Barn
Can I use PayBright in-store?
Those who still prefer shopping brick and mortar are in luck. PayBright does offer its payment plans in-store. If you want to see if the product you want is available in-store and under their coverage, give the store a call and ask.
What do I need to qualify for a PayBright plan?
To qualify, you'll need a Canadian Visa or Mastercard credit card. And, you'll need to be a resident of Canada and over the age of 18 years old. As you may be reading this a month after publication or a year after publication, you must go to PayBright's website and check their requirements at the current time.
What are PayBright's payment plans?
Before we start, it's essential to note that although PayBright does have two default payment plans, not all merchants will offer them. Before completing the process, you must figure out if your optimal payment schedule is available at the merchant.
Pay in 4
The Pay in 4 plan allows you to make four bi-weekly payments to fulfill the purchase.
Some benefits of the Pay in 4 plan:
- No need for a credit report
- Payments are interest-free
- No processing charges on the purchase
- The majority of merchants have this payment ability
- You own the item after the first payment is complete, not the fourth
Downfalls to the Pay in 4 plan:
- Purchases are capped at $1000. So, more significant purchases cannot be completed with it
The monthly plan allows customers to pay for a product with equal monthly payments.
Some benefits of the monthly plan:
- Can potentially still be interest-free
- Can spread larger payments out over longer durations of time
- Payment schedules and dates are available from your PayBright account.
Some downfalls of the monthly plan:
- Requires a hard credit check and could impact your credit score
- Length of borrowing can be dependent on the merchant's options
- Depending on your credit score and potentially even the merchant's rules, interest rates can get as high as 30% APR. It's essential to understand the terms of your payment plan before buying
Is PayBright trustworthy?
In short, yes. The company is owned by Affirm, one of the global leaders in point-of-sale loans. The company has over 7000 Google reviews with a 4.4-star rating and a 4.6/5 rating on Trustpilot with over 7800 reviews.
Does PayBright affect your credit score?
This is solely dependent on the loan you choose. PayBright's Pay in 4 plan doesn't require a hard credit check from the credit bureaus to get approved. However, applying for the monthly instalment plan requires a credit check and could impact your credit score if you miss payments. So, it's crucial not to overspend or overextend yourself with BNPL loans.
How will PayBright determine how much I can buy?
The company's approval process is relatively easy because it uses automation to determine how much a PayBright user can borrow depending on their credit limit.
The company will automatically enable you to borrow more when your credit score goes up.
Is PayBright interest-free?
The company's Pay in 4 plans are entirely interest-free. Suppose you apply for the monthly instalment plans. In that case, although some are still interest-free, you can pay a particular amount of interest depending on the current offering and your credit score.
Is PayBright hard to get approved?
The approval process of PayBright is straightforward and often only requires a few minutes in terms of its Pay in 4 plan. When it comes to monthly instalment plans, it becomes a little more extensive as credit checks are involved, but the process is still relatively easy.
How does PayBright make money?
The company makes money primarily by charging merchants a fee to have the ability to use PayBright's payment plans. However, they also make money via the interest they charge on the month-to-month instalment plans they issue. Finally, although their Pay in 4 plans do not have processing fees, they charge the fees on their monthly plans.
What happens if I don't pay PayBright?
Much like missing a credit card payment, there is the potential you could owe PayBright some fees if you decide not to pay or miss a payment.
If you continue beyond just missing a single payment, it would be much like a traditional credit card as well in the sense that the company will report you to collections if you do not settle arrears.
What are the main alternatives to PayBright?
Every year more companies are entering the Buy Now Pay Later market. However, the most significant alternatives to PayBright at the time of this article are SelectPay, Zip, and Afterpay.
Each BNPL company will offer various fees, maximums on particular payment plans, customer service options, and availability at specific merchants. It may be wise to do some digging before choosing your BNPL processor.
The main pros and cons of using PayBright
- No hidden fees, charges, or in some instances, interest
- The ability to spread out payments on larger options and multiple payments over two months on smaller items
- Often, a real-time decision in terms of approval and approval rates are relatively high
- With over 7000 merchants, it's highly likely your favourite stores utilize BNPL
- Strong customer support through their PayBright Help Site
- Their monthly payment plans can accrue interest
- Missed payments have the same impact as a missed credit card payment
- If you're a poor budgeter, overspending becomes easy
- You need a minimum cart size for PayBright to approve your purchase
- If you're a merchant, there are merchant fees to implement the platform in your store
Overall, should you be using PayBright?
I believe if you have the money to pay for something, pay for it. My preferred payment choice is most certainly with the cash you have. It's pretty easy to rack up your shopping cart with BNPL items and eventually realize, "woah, I've spent way too much."
So, the best way to budget is to buy things with the money you have. If you have $200 right now, what is the difference between paying that money immediately over spreading it out into bi-weekly instalments over two months?
The monthly PayBright payment plan, however, has its uses, especially if you can lock in an interest-free or low-interest rate at a reasonable term.