, India
Photo courtesy of David Dvoracek.

Buy now, pay later gains traction in India

Low credit penetration makes it favourable for BNPL.

Buy now pay later (BNPL) services are emerging as a feasible credit alternative for e-commerce purchases in India, according to data and analytics company GlobalData.

BNPL can act as an emerging alternative in countries with low credit card penetration, providing consumers with the flexibility to pay for their purchases at a later date with low to no interest. India’s credit card penetration is five cards per 100 individuals.

Also Read: Buy now, pay later more needed in markets with credit under penetration: UOB TMRW exec

“The increasing credit demand coupled with growing preferences for e-commerce, has made the BNPL service as one of the preferred short-term borrowing tools among the consumers,” said Ravi Sharma, lead banking and payments analyst, GlobalData.

Sharma added that the country’s large young population, gradually rising consumer spending, growing preference for online channels and electronic payment methods will support the growth of the BNPL business model--and that BNPL could possibly challenge the existing credit models for online purchases in the long-run.

Amongst BNPL platforms gaining traction in India is LazyPay, a well-known brand offering pay later option, which now has over one million customers and has reportedly registered over 10 million transactions till date. 

Other well-known brands operating in this space include ePayLater, Simpl, ZestMoney, Capital Float.

Leading e-commerce providers are also now offering their own BNPL solutions.

Amazon launched its pay later solution called ‘Amazon Pay Later’ in April 2020. This has already gained popularity among Indian online shoppers, accounting for 16.4% of the total Indian e-commerce market as of 2021, with over 10 million transactions across over million consumers as of June 2021, according to GlobalData.

Flipkart, Amazon’s main rival in India, also offers a BNPL service called ‘Flipkart Pay Later’ with over 2.8 million customers as of July 2021.

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