11/13/2020 Fintech riding the ‘buy now, pay later’ wave this season - The Economic Times

English Edition | 13 November, 2020, 10:51 AM IST | E-Paper

Fintech riding the ‘buy now, pay later’ wave this

season
Synopsis
Banks, non-banks seek tie-ups for easy access to consumer durables loans

ETtech

Illustration: Rahul Awasthi

There seems to be a new trend among shoppers – Buy Now, Pay Later.

The Covid-19 outbreak, which pushed digital modes of payment, and a revival in consumer demand during the festive
season months, have given rise to this trend.

To cash in, banks and non-banks are tying up with consumer-facing ntech companies to help shoppers access
consumer durables loans easily.

These are for purchases at o line stores through point of sale (POS) terminals and at online marketplaces such as
Flipkart and Amazon.

The trend has picked up since August on latent demand in the consumer economy after depressed demand during the
initial months of the pandemic, said Amrish Rau, the CEO of Pine Labs, a merchant commerce ntech rm that enables
such transactions.

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11/13/2020 Fintech riding the ‘buy now, pay later’ wave this season - The Economic Times

“In the rst 10 days of November, our platform has already processed Rs 1,000 crore of BNPL purchases,” said Rau. “Most
of these purchases are above Rs 5,000 in categories such as electronics, apparel, lifestyle and smartphones.”

The trend has been seen across small towns and corner shops selling high-ticket goods such as mobile phones and
electronic items, and not constrained only to purchases at bigger outlets in metros.

On the backend, these transactions are enabled through network integrations between retail marketplaces such as
Croma or Reliance Retail with the inventory of manufacturers such as Apple or Adidas.

The nanciers on Pine Labs' network then o er credit in real time after running a quick check of credit scores and brand-
related incentives, Rau said.

“We encourage our credit and debit card customers to avail the payment exibility o ered through the EMI option across
merchants,” said Sudipta Roy, Head - Unsecured Assets, ICICI Bank.

ICICI Bank and HDFC Bank are the prominent lenders that give these kinds of credit options.

“We believe that this proposition will enable lakhs of customers to make their purchases in a seamless manner in this
festive season…," Roy added.

Buy Now, Pay Later is di erent from credit card purchases.

They are "form-agnostic" and can be enabled after the customers credentials are authenticated at the checkout point.
Hypothetically, such transactions can be done without any payment instrument, using just an ID card. Moreover, the
repayment contracts are exible, depending on the credit scores of customers.

Fintech players such as Capital Float, FlexPay, Zest Money and EasyPay are among the leading enablers of such
transactions in the online space.

In the interaction, Gaurav Hinduja, Co-Founder, Capital Float said, “In terms of disbursal, we are doing about Rs 100
crores per month on this product. We have disbursed Rs 500 crores in BNPL loans since April 2020.”

“The di erentiator is the one-click checkout experience it o ers to customers. The authentication is enabled through
their debit or credit cards and the loan is approved in real-time,” Hinduja said.

At Capital Float, customer purchases on e-commerce, travel and ed-tech platforms were the major categories where
spends were converted to BNPL, he said.

Croma has seen increased demand for instalment-based purchases, said Kapil Budukh, GM- Marketing.

“Over the last few months… we have witnessed increased consumer preference for purchases on EMIs,” he said.

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11/13/2020 Fintech riding the ‘buy now, pay later’ wave this season - The Economic Times

Payment options like xed EMIs and instant discounts on certain bank cards are driving consumer interest and
incremental transactions, he added.

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