The Buy Now Pay Later or BNPL segment has started to revive during the festive season of 2022, with many players expecting strong numbers in the coming months. While the recent guidelines from the Central bank on the digital lending sector made many players halt their operations, consumer behavior shows a different story. More shoppers are willing to select either zero-interest EMIs or short-term personal credit to manage expenses related to the first full-fledged festive season post pandemic. This also corresponds to a world of opportunities for both online and offline merchants to increase sales and order value by enabling the BNPL payment option on their online stores.
Here’s what the numbers say about the BNPL segment
- BNPL spending for this festive season began in the last week of September 2022 and is up by 50 to 60% in comparison to the similar period in the last year.
- The overall BNPL disbursements during this festive period are expected to be three-four times higher than the pre-pandemic period, as estimated by Grant Thornton Bharat.
- It is also expected that there will be a four times year-on-year increase in loan applications and a two times increase in personal loan disbursals on digital lending platforms.
- Small ticket size loans surge among millennials, while the average loan ticket size stood at Rs. 30,000 in 2021.
E-commerce Industry and BNPL – What’s the statistical connection?
If you look at the IBEF data, the Indian ecommerce market is expected to reach the mark of US$350 billion by the year 2030. In parallel, the Buy Now Pay Later payment segment in the country was predicted to grow by 72.7% annually in 2021, says the Q2 2021 BNPL Survey.
When considered together, it indicates a significant headroom for mutual growth of both online merchants and fintech players.
What’s in the non-metro picture of the BNPL canvas?
Another estimate by Grant Thornton revealed that there has been a 50% approximate increase in credit demand during this festive season. This is almost double the 25-30% average festive season demand for credit. The underlying reason for this is the new leads coming in from Tier 3 and 4 cities in India. Interestingly, these new leads constitute a significant proportion (55%) of the overall new leads generated.
These results can be attributed to the increasing awareness and easy access to BNPL offerings to the masses living in smaller Indian cities. Such credit offerings are otherwise limited to a certain set of target audience only, not all.
What’s in it for online merchants?
Indeed, running a business that has an omnichannel presence simply implies tough competition with existing, established brands in your niche. While most online businesses accept payment via different payment sources, not all of them have the BNPL option enabled alongside. In other words, your business can get an edge against the competitors by enabling the customers to pay via the BNPL payment option.
Thinking of setting up the financial part, credit-worthiness assessment process, or ways to gauge related risks? You can skip all these steps in integrating the right payment gateway that comes with a BNPL offering. With the global BNPL industry expected to grow 10-15 times, enabling the BNPL payment option can be one of the best business decisions you make in 2022.
Paytm Postpaid – the simplest BNPL offering for your business and customers
Paytm Postpaid enables Paytm users to get a short-term financing option as per their eligibility and application status. Once they have applied for Paytm Postpaid and are eligible for a certain postpaid limit, they can simply use it to make payments like using any other preferred payment mode.
The best part is – you, as an online merchant, can simply benefit from this offering by switching to Paytm Payment Gateway. Along with 100+ payment sources it supports, Paytm Payment Gateway adds Paytm Postpaid to the payment options list on your online store.
Recommended Read: Paytm Postpaid – Enabling New to Credit Users to Shop Online
What the future has in store for BNPL in India?
The rate at which the BNPL segment has grown in the country shows no signs of slowing down in the coming years. While it stays, it will attract more consumers towards making instant purchases without worrying about paying for it at the same time. It’s about time that we get to see the complete picture of the BNPL sector growth.
