BNPL: New Kid On The Block For Driving Festive Season Sales
Consumer Behaviour and spending patterns have transformed radically over the years, with different ways of transactions. This switch in pattern has thus seen the ascent of the Buy Now, Pay Later (BNPL). This word is taking the world of finance by a blizzard.
Better customer experience, access to easy finance, short EMIs with no additional cost, and making it available for anyone irrespective of past credit history, making BNPL an attractive mode of payment for purchases.
This offer seems to be in vogue this festive season as many sectors like e-commerce, retailers and banks have lined up schemes for festivities. eCommerce has emerged as one of the biggest beneficiaries of BNPL. As many borrowers can now relish the short-term credit offerings.
“The increasing awareness about this instalments-based payment is expected to propel market growth which has been affected by the Covid 19 pandemic, the crisis has limited household incomes and the search for liquidity has been elevated and is expected to continue to grow throughout 2021” referring towards the growth of BNPL offer Gaurav Anand, CEO & Co-Founder, Namaste Credit said.
According to the Q2 2021 BNPL Survey, the BNPL payment in India is expected to grow by 72.7% on an annual basis to reach $6327.2 million in 2021. In fact, India has a fast-growing economy and is projected to continue growing in the future because of its demographics and high youth population percentage.
Until recently, D2C companies were dependent on banks to provide affordable payment solutions. But now many are turning to fintech start-ups to offer seamless buy now, pay later financing to shoppers. The key reason why brands offer buy now, pay later to shoppers is because this payment option increases their checkout rate, average order value, and also helps retailers get more prepaid orders.
The growth trajectory of BNPL as an industry is upward. It is making the consumer experience smooth and convenient for them. According to Bhavin Patel, Co-Founder & CEO, LenDenClub said, “This festive season every shopaholic’s go-to solution is Buy Now Pay Later. Young millennials and Genz’s are attracted to the BNPL service due to the ease of making part-payments for products they bought online or at stores, without additional costs or fees.”
On the other sphere, small businesses are getting leverage from this trendy way of business ahead of the festivities. Crediting money has become a new way to reduce the hole in lack of cash without a debt scenario. The mom-and-pop Kirana store or self-employed people generally face problems with loan credits from the financial institutions and banks. The companies are now offering them immediate short loans without much paperwork and inconvenience.
Usage of BNPL is no longer limited to high-value purchases like electronics, shoppers are using it for day-to-day needs, including personal care, nutrition, and food. In the words of Vandhana Parkavi Valaguru, Country Head, Sezzle India “Obtaining credit was traditionally viewed as a cumbersome and slow process, however, with BNPL becoming mainstream that’s changing. What shoppers like the most about BNPL are the transparency and safety it offers.” - -Vandhana Parkavi Valaguru, Country Head, Sezzle India.
