WHILE THERE IS an enormous hole in credit score demand and provide and entry to credit score has been significantly difficult, particularly for youth and new- to-credit clients, resulting from restrictions on issuance of bank cards by some massive banks and fee networks —‘buy now pay later’ (BNPL) is changing into a most popular mode of fee for e-commerce transactions.
“Currently, only three in every 100 Indians own a credit card… Additionally, the tedious application process for credit cards adds to the woes of young Indians who demand a hassle-free and quick experience,” stated Anup Agrawal, enterprise head of PayU-owned BNPL agency LazyPay.
As per information launched by RBI in March final 12 months, solely 62 million bank cards are in circulation within the nation. Just to make a tough comparability, LazyPay— which was launched in 2017— has a pre-approval base of 62 million clients right this moment, of which 4 million customers are at present energetic. “We have disbursed over $900 million in credit to customers in FY21 and projected to hit $2,500 million in FY22. Additionally, LazyPay saw an uptick of 70% in user acquisition in 2021 as more and more consumers, specifically from outside of the top 10 cities in India, turned towards the convenient payment option for their purchases,” added Agrawal.
So, what precisely is BNPL? “Simply put, with BNPL, the consumer can make a purchase and opt to pay for this purchase at a later date (at no extra charge). It aims to better the consumer experience to enable frictionless commerce,” stated Nitya Sharma, co-founder and CEO of BNPL platform Simpl, which has grown exponentially since its inception in 2015 with at present over 15,000 service provider companions and 25 million customers throughout India.
No marvel, BNPL is sure to expertise an enormous surge within the coming years. According to a report launched by administration consulting agency RedSeer in February this 12 months, the fintech subsegment is transferring at a 65% year-on-year progress and is all set to the touch a staggering ~$40 billion by 2025. This is very true for India, as extra Indians (28%) are prone to buy utilizing BNPL providers within the subsequent 12 months than shoppers in different markets internationally, as per a brand new report by world market analysis and information analytics agency YouGov.
But why is BNPL changing into so widespread amongst Indians, particularly among the many children? BNPL affords comfort and affordability in its present type. In phrases of comfort, deferred fee is a low ticket-sized answer utilized by shoppers to allow them to get pleasure from experiences and keep away from the hassles of upfront fee with each transaction. This is an interest-free fee choice if paid inside the reimbursement cycle of 15. days, as adopted by LazyPay.“On the other hand, BNPL for affordability is a large ticket-sized solution that is used by consumers looking to buy desired products or services without any delay and pay later in small EMIs,” added Agrawal. The EMIs vary from 3-12 months, with zero to minimal curiosity.
Source: www.financialexpress.com”