“The past is always tense, the future perfect” – Zadie Smith
This quote symbolizes the essence of change everywhere in the world, including the sphere of businesses and consumers.
Back in the day, you’d have to plan a visit to the market with the hope of buying the product you want. Salesmen were the intermediaries for product information before Google happened. Making an informed decision for any purchase meant finding the right product and then the right salesman who knows everything that you want to know. Then technology transformed the way we shop.
Internet penetration is expected to double to 60% by 2022 in India as per PwC Research and Insights. With booming digital payments, India is on its journey to becoming a 5 trillion-dollar economy by 2030.
The Internet and smartphones in the past have fundamentally changed the way Indians interact, consume information, and even transact. Fueled by UPI transactions, mobile payments in India for example, have grown by almost 300% in the last four years. India, which used to be a cash-driven market largely, is seeing greater adoption of digital products even for lower funnel transaction use cases.
Amidst this growing Internet user base, India’s consumer credit market is also projected to grow despite the pandemic, says Experian report. The report also covers the Indian consumer credit market which is growing at a rate higher than major economies worldwide. It is because of the paradigm shift in consumer behavior for credit-fueled consumption.
Peeping Into the Indian Credit Market
The Indian credit card industry is on the rise and is expected to grow rapidly during 2020-2025 at a 25% CAGR, as per the report named, ‘Customer Priorities – Credit Card Users in India’ by Research And Markets. The number of credit cards in India has also grown from 18.7 million in 2013 to 57.8 million in 2020, as per Statista.
However, for new-to-credit consumers, the credit card application process involves a stringent assessment of creditworthiness. Since this does not fulfill their need for credit, they are more likely to look for easy-to-avail credit offers, which can be repaid in a shorter period with or without paying any interest.
Understanding the Buy-Now-Pay-Later mindset of consumers
For any online business selling goods to Indian consumers, a big proportion of the target audience includes millennials (400 million+) and Generation Z or Gen Z (472 million).
But the way these segments of the population spend is different from their predecessors. They are also more open to accepting payment products based on convenience and utility. You can easily find them hopping on the trend of ‘Buy Now Pay Later’ to spend money for regular or miscellaneous needs instead of swiping credit cards, if they have any.
More particularly, they are more inclined towards using card-less payment methods which can be used via their mobile phones.
If you’ve been in the online retail business for quite some time, you have likely noticed the shift in consumer attention towards brands/stores that provide Buy-Now-Pay-Later facility. Previously, it was largely utilized by big retailers to increase the purchasing power of their customers, thus encouraging larger average order value and higher sales.
On the other hand, the credit card industry has expanded at a CAGR of 15% till the end of the last decade, says CRIF data. It is further expected to grow at a CAGR of 25% during 2020-25. However, there are only 3 credit cards for every 100 individuals in India, compared to 32 cards in the United States of America.
Credit card applications for Gen Z go through stringent checks and often get rejected on the grounds of low credit score, low income, and occupation/employer’s reputation. The credit card demand and supply gap have fueled the need for ‘Buy Now Pay Later’ as a payment source with which Internet-savvy customers can get instant credit lines by just submitting their background and KYC details in just a few taps and clicks.
According to a recent survey by Goldman Sachs, the Buy Now Pay Later mode grew by a whopping 65% in Q4’2020 and is expected to grow at a CAGR of 24% to drive a GMV of $52,827.2 million by 2028, up from $6,990.5 million in 2020.
How can businesses benefit from enabling the Buy-Now-Pay-Later facility?
With changing times, even small online businesses are willing to opt for consumer financing options. While they might not have had the means to set up the financing program, lend funds, and accept risk, they can make the bold move with the help of the right payment solution provider.
As a matter of fact, the average Order Value increases by 15% for businesses that offer a consumer credit facility. Interestingly, most first-time consumer credit applicants prefer to use such credit facilities again.
New bikes, new gadgets, new home, making up a new life – as the discretionary spending and income of millennials go up, so does the need for financing and easy-to-avail retail credit.
The numbers foretell that the future would be bright. It’s time that you start offering the ‘Buy-Now-Pay-Later’ facility to compete with legacy brands. It will be good for your business as consumers want it too.
Recommended Read: Average Order Value – Why It Matters for Your Business?
Enable Paytm Postpaid and your customers will come to buy from you
Paytm Postpaid can be considered a synonym of the ‘Buy-Now-Pay-Later’ model of customer financing in the modern era. It is a feature/service with which Paytm users can buy something now and pay for it later – quite similar to a credit card.
With this service, Paytm aims to enable new-to-credit users to begin their credit journey. It can help them manage liquidity better by paying household bills and manage regular shopping payments easily.
Paytm Postpaid comes with several benefits for both consumers and businesses. Let’s get into its details.
Paytm Postpaid defined – Benefits, Features, and More
| Description | |
| About Service/Feature | Buy-Now-Pay-Later offering from Paytm enabling consumers to shop now and pay at a later time |
| Who can use Paytm Postpaid? | Paytm users can make payments to groceries, daily use purchases, bill pay, franchise merchants, oil, and gas, etc. |
| What is the interest-free period available with Paytm Postpaid? | 37 days (due date being 7th of every month) – No interest charged for this period |
| What makes Paytm Postpaid different? |
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| Where is Paytm Postpaid available? |
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| What are the activation charges for Paytm Postpaid? | No activation charges |
| What will be credit limits available to Paytm users under Paytm Postpaid? | Based on the user’s eligibility (the credit limit will receive may vary depending on their creditworthiness) |
| How much time does it take to get Paytm postpaid activation done? | Paytm Postpaid limit gets instantly activated once approved. |
Paytm Postpaid: Is it different from credit card usage?
Credit cards have long been a favourite payment source for many Indian consumers to get easy access to unsecured credit. But the convenience of digital cardless payments are proving to be the driving force behind the increased adoption of Paytm Postpaid towards millennials.
What makes Paytm Postpaid even more appealing to the users is that users can get activated in a few clicks with minimal KYC details.
Coupled with easy onboarding, this ‘Pay Later’ service by Paytm circumvents several downsides related to credit card usage – high interest rates, complicated terms of service, and annual fees.
How can Paytm Postpaid benefit your online business?
Here are some of the benefits of having Paytm Postpaid as a payment source available with your online business:
100% upfront payment
As an online store owner, you would want to get paid right away after receiving an order, no matter whether the customer pays the full amount to Paytm or spreads the cost. With Paytm Postpaid, you will get the funds transferred to your account immediately upon a customer’s purchase.
On the customer’s side, they get enough time to pay for their purchases, making it a win-win situation at both ends.
Bigger orders, higher sales
Giving your customers access to instant credit via Paytm Postpaid during online checkout or while making payments increases their purchasing power. At your end, it can help drive sales and increase average order value. In simpler words, you can plan for business growth by having Paytm Postpaid facility available to your customers.
For many customers, a commonly cited reason behind abandoned carts is price. By enabling them to use Paytm Postpaid as a payment source, you can reduce the price shock, encouraging shoppers to complete their orders.
Recommended Read: Average Order Value – Why It Matters for Your Online Business & How to Increase It
Free to offer
While you may find some other lenders charging a certain fee to enable instant credit facility, Paytm Postpaid is free for you to offer. You just need to integrate Paytm Payment Gateway into your online store. As a retailer, you would get access to the Paytm user base that is 450 million+ strong.
Also Read: What Makes Paytm Payment Gateway the Best in India?
The bottom line
Indian consumers from different demographics are known for their desire for everything ‘new’. Knowing the finer nuances related to credit card eligibility and application process, they are more eager to accept Paytm Postpaid as a payment method. It also enables them to spread big purchase payments over a period of one month without the accrual of any interest fee.
With the e-commerce industry in India growing at a rapid pace, there’s a lot at stake for you to improve conversions on your online store. Giving your customers the flexibility to use Paytm Postpaid facility can make the difference between successful orders and loss of potential customers.
Ready to join hands with Paytm Payment Gateway?
