The Increase Of Buy Now Pay Later In India

Buy Now Pay Later has become an important headline ever since US fintech giant Square has announced an all-stock acquisition of Australia-based Afterpay for $29 billion in August this year. Buy Now Pay Later is a way in which consumers can buy products and make staggered payments in a time period of say 10-15 days or some cases they can pay in no-cost equated monthly instalments for three to six months. This procedure is easily accessible at points-of-sale or e-commerce checkouts and it does not need any extensive paperwork as such. But, if a consumer fails to make the payment on time, interest charges will be applicable. There are companies such as ZestMoney, Ezetap, KredX, Amazon Pay, LazyPay and Simpl and Slice, who are paying for these kinds of consumers.

This system is a win-win proposition for all in the ecosystem. In it, the seller will get instant payment and increased cart value increased conversion rates and overall footfall in their products. The consumer on the other hand gets affordable solutions that increase their purchasing power. This system is growing day by day. Ezetap is a digital payments company, that has claimed to be recorded a steep increase of 220 per cent in the transactional volume of EMI in July 2021 compared with February 2020.

Ezetap head of products Bhaskar Chatterjee has commented how different this payment system is from EMIs. He said “EMI was earlier simply offered by the banks via credit cards for the purchase of smartphones or higher-priced products.  Today, BNPL is an umbrella term for multiple fintech products that a customer can use to purchase an item, using one of the many credit line instruments available in the market”.

India’s credit card penetration is also much lesser than its global peers which have widened the opportunities for BNPL in India. The co-founder and director of BlackSoil have commented “Though credit cards are one of the most lucrative products for a bank, the credit card penetration continues to be low in India compared to developed countries. This can be attributed to the conservative approach of banks that issue credit cards only to super-prime customers. Also, the high interest rates and hidden costs have made Indians distrustful of credit cards”.