The last two years have been phenomenal for online education startups. And why not. With schools and colleges being shut for a good part of this period, online education companies have been the only alternative for students.
User signups on edtech platforms skyrocketed in 2020 and 2021 as the country was under lockdown due to Covid-19.
Investments in startups offering online education also saw proportional growth. VC funds pumped in $4 billion in edtech companies in 2020 and 2021, according to a Blume Ventures Report. This is grossly high compared to USD 500 million funding in 2019.
Evolution of online education in 2022
While edtech companies have been busy onboarding new users in the last two years, most of the courses are either available for free or at a freemium model.
In 2022, online education companies will have to graduate from this model and get users to pay for online classes.
While Covid-19 has resulted in a high number of students using online learning tools, it is also the reason why parents are not able to pay for online courses. A large number of the working population either lost their jobs or saw significant cuts in their salaries.
Now, get this: there were 860 million debit cards in India in September 2020. With job cuts, debit cards are no more a viable mode of payment – at least till the time the job situation gets better. The next option is credit cards. However, credit card penetration is really low in India. The total credit card base in 2020 was hovering at 58 million according to a report by Statista.
This shows that edtech companies are dealing with a conundrum. On one hand, the demand for online education is soaring, on the other hand, they are unable to provide the right payment option that clicks with parents.
Grow paid customer signups with Buy Now Pay Later
Historically, credit card circulation in India has remained low because banks make it really difficult for users to get one. Most of the applicants get weeded out in the assessment process, which is banks’ way to check applicants’ creditworthiness. The ones that do make the cut, receive a really small amount of credit.
This is why the market for ‘Buy Now Pay Later’ is seeing staggering growth in India. A Goldman Sachs report said the Buy Now Pay Later market is expected to grow at a CAGR of 24.2 percent between 2021 and 2028.
This is largely led by e-commerce companies where millennial and Gen-Z customers are lapping up BNPL payment options as they don’t require buyers to have a credit card.
BNPL essentially allows users to purchase the product of their choice and pay later – either in installments or in one go.
Benefits of offering Buy Now Pay Later
- Increase in sales: A large number of students from tier 3 and 4 cities are unable to pay for online courses as their parents don’t have a credit card. The Buy Now Pay Later payment option will make these online courses accessible to them and increase sales for edtech companies
- Competitive edge: Although Buy Now Pay Later is all the rage now, very few online education startups have this payment method on their websites. One can get a significant competitive advantage by being one of the first few edtech companies to offer BNPL
- Financial inclusion: Allowing students to avail the benefit of Buy Now Pay Later method will open online education for first-time credit users. If not for this payment option, they would not have been able to buy the course
- High rate of repeat buyers: Once students are able to take online classes via the Buy Now Pay Later method, there is a high chance of them enrolling for other courses as well. Not just that, the word-of-mouth publicity will also rile up paid users
Use Paytm Postpaid to increase paid user signups
Limited payment options are one of the main challenges online education companies face when it comes to enrolling users for paid courses. It’s a well-recognised fact that users abandon their carts if they can’t find a suitable payment method on the checkout page.
Since access to credit is limited and Buy Now Pay Later is proving to be the next best alternative, Paytm has brought Paytm Postpaid, a similar credit-led payment mode for edtech startups.
Till now 3 million users have shopped online using Paytm Postpaid. Moreover, businesses that offer checkout via Paytm Postpaid have seen a jump of 20% in GMV compared to before using this service.
Adding Paytm Postpaid payment method to the checkout page will encourage students to buy the online courses that they have not been able to purchase.
Why Paytm Postpaid is the best offering for online education
Online education companies that employ Paytm Postpaid not only get access to first-time credit users, they also attract parents who do have credit cards. Why you ask? Unlike credit cards, Paytm Postpaid doesn’t charge exorbitant interest rates or any annual fees.
These are just the basic benefits of using Paytm Postpaid. This credit-based payment option comes packed with an array of benefits:
- Simple and free onboarding
We have made it really simple for students or parents to start using Paytm Postpaid. There is no documentation required to activate a Paytm Postpaid account. With just a few clicks one can open their account in a few minutes. Additionally, we don’t charge anything to students or online education companies to activate the Paytm Postpaid account.
The benefit for online education companies is that once the user activates their Paytm Postpaid account, they can buy the online course of their choice with just a single click.
- Higher conversion rate
It’s a well-reported fact that Buy Now Pay Later results in high conversion rates. A report by Mastercard said BNPL solutions have the potential to increase average sales by 45 percent and reduce cart abandonment by 35 percent post-implementation.
Paytm Postpaid works specifically for online education companies that offer upskilling courses to working professionals. Since these courses are of high ticket value, many candidates can’t afford them. In such a scenario, they can buy the course using Paytm Postpaid and pay fees over the next few months.
For online education companies that want more and more paid users, this is simply a boon.
- Upfront payment
When a student uses Buy Now Pay Later, does that mean the edtech firm doesn’t get the money since the purchase is on credit? It would be truly absurd for online education startups if at the end of the day their paid user numbers go up but the bank account balance shows no movement.
As soon as students buy the course with Paytm Postpaid, online education companies receive the full fees. This means that while students get to avail the benefit of paying later, edtech companies are not left hanging.
Online education companies get to eat the cake and have it too.
- Easier financing
Paytm Postpaid is the best credit-based payment option out there. Users can avail credit of up to Rs 60,000 at no interest for 30 days. In Addition to this, students can further convert their purchase into 12 EMIs, if needed.
This feature is specifically useful for students who choose to buy more than one course using credit in a month and find it difficult to clear the bill every month. The EMI offering further eases the monetary pressure.
At Paytm we believe in financial inclusion. And just because not everyone can get their hands on credit cards doesn’t mean they should be deprived of availing high-quality education.
Give students the financial freedom to buy the course they like by integrating Paytm Postpaid to your online education platform.
