Is “Buy Now Pay later” the Future of India

 Is “Buy Now Pay later” the Future of India

Online shopping was encouraged by the economic shifts brought on by the pandemic. To order groceries, clothing, and other necessities, people turned to the internet. Buy Now Pay Later (BNPL) arose as more than just a straightforward payment method; by providing free EMIs, it essentially lessened borrowers' financial stress.

Consumer demand will cause the Indian e-commerce market to grow to $99 billion by 2024. In addition, BNPL will experience the strongest rate of growth, going from 3% in 2020 to 9% in 2024.

·        How Common is BNPL as a mode of payment?

Due to the emergence of e-commerce and digital payments as well as the quick growth of Fintechs, buy now pay later (BNPL) is a developing loan tech sector in India. In addition, GenZ consumers, young millennials, and first-time credit borrowers, who are typically overlooked or underserved by traditional banks, choose BNPL since it is so easy to acquire credit.

A study predicted that the $3–3.5 billion BNPL market in India would increase to $45–50 billion by 2026. The research firm estimates that by then, up from the current 10-15 million, there may be 80-100 million BNPL users in the nation.



·        Is BNPL a better option than Credit Cards?

For a more seamless user and merchant experience, digital natives and tech-savvy clients, millennials and Gen Z, are increasingly embracing the idea of micro-credit and purchase now pay later services.

Credit cards have been used for many years and have gradually but certainly entered the ecosystem of online shopping. On the other hand, time and effort are expended due to the challenges of verification, credit score requirements, multiple rounds of identification, etc.

As millennials  grow impatient with conventional paperwork and demand for flexibility and transparency increases, BNPL has stepped up to eliminate these areas of friction.

·        Is BNPL the future of lending?

India's lending market is simply too big for one person or industry to handle. BNPL won't replace traditional credit, but because of the strength of cooperation, it might improve it in two ways.

To start, BNPL has the capacity to offer loans to an economy like India that is credit-starved. In contrast to traditional credit, BNPL loans are mostly used for online shopping and utility bill payment. They are quickly evolving into a common sort of online transaction as a result of this mix.

Due to this, people are beginning to view BNPL less as a lending instrument and more as a lifestyle icon that enables them to affordably purchase the goods they want. The following billion will enter the mainstream banking system thanks to BNPL. Since the vast majority of BNPL borrowers are first-time credit users, BNPL is making it easier for them to establish credit histories and join the formal financial sector, thereby enhancing financial inclusion in the nation.

These credit history details may also be used by conventional financial institutions to create a more accurate and effective credit risk assessment model. Access will be simpler for those who have been denied credit as a result.

                                                                                                       -O. J. Himani

                                                                                                          B15-25.

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