© Reuters. Ape Now And Pay Later: Buy Now Pay Later Comes To NFTs — Here Are The Details
A new program is offering the opportunity to secure a non-fungible token from a series of “blue chip” collections now and pay for it later. Here’s how the popular “buy now, pay later” financing program that has taken on several industries is now headed to NFTs.
What Happened: Decentralized lending protocol Teller, which is based on the Polygon (CRYPTO: MATIC) platform, is offering the opportunity to make a down payment and take out loans on NFTs and pay them off over time, according to a report from Decrypt.
The new service is called “Ape Now, Pay Later.”
Teller CEO and founder Ryan Berkum said the new offering fills a need in the NFT market, particularly for expensive collections.
“Buying NFTs is one of the core things Web3 consumers want to do right now,” Berkum told Decrypt. “Buy now, pay later is a no-brainer.”
Down payments under the financing can cost as much as 50% of the price. Users can select an NFT from an available collection on OpenSea and then are matched to potential lenders. The customer pays the down payment and the lender pays the rest. The NFT is purchased and put in an escrow wallet until all payments are made. The NFT is transferred to the customer after the payments are made.
If the buyer defaults and does not pay back the loan, the lender can claim back the NFT from escrow and sell it.
These are the current NFT collections offered as part of the Ape Now, Pay Later program from Teller:
- Bored Ape Yacht Club
- Mutant Ape Yacht Club
- Cool Cats
- Adidas (ETR:) Originals: Into the Metaverse
- Murakami Flowers Seed
Investors in Teller include Animoca Brands and OpenSea.
Related Link: Celebrities That Own Bored Ape Yacht Club NFTs
Why It’s Important: The program from Teller is similar to traditional buy now, pay later offerings from companies like Affirm Holdings (: AFRM) and Klarna that offer the service for retailers.
As the NFT market grows, existing technology from other sectors is making its way into the fold. This includes the introduction of buy now, pay later and has also seen several companies offer loans using NFTs as collateral.
With the volatility of the NFT and cryptocurrency market, there could be huge growing pains for a platform like this. If NFT collections see a fall in value, buyers may choose to stop making payments on the loan.
Berkun called the new offering similar to buying a product with a credit card, or existing buy now, pay later programs for other items.
Mastercard (NYSE: NYSE:) recently announced plans to offer credit card purchases on some NFTs.
Price Action: The floor price of Bored Ape Yacht Club at the time of writing is 99.7 (CRYPTO: ETH) or around $116,752.
Under the terms of the Ape Now, Pay Later program, a user would pay around $58,376 as a down payment on a Bored Ape and make the rest of the payments over time before having the Ape in their wallet.
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