Simpl, LazyPay, and the future of Buy Now Pay Later in India

BNPL companies offering small-ticket credit have stickiness but low margins. Bigger lenders offering big-ticket loans on EMI have the margins, but not the stickiness. They each want what the other has. But getting there might mean more merging into a traditional lending model, less disrupting the space

Payments gateway Razorpay saw a year-on-year spike of 163% in the number of Buy Now Pay Later transactions it facilitated in November 2020

The successes of global BNPL giants such as Afterpay and Affirm have spurred an interest from BNPL service providers such as Pine Labs and ZestMoney

Companies’ BNPL offerings vary wildly, both in lending and repayment models as well as credit limit

In the future, BNPL may look very different from its current iteration. But maybe not so different from traditional lending

Consider this: out of 900 million Indians who use banking services, barely 30 million 30 million The Economic Times Credit card usage rides on digital push, grows 27% Read more are unique credit card holders. That’s only around 3.33% of banked Indians with easy access to credit. Not having enough credit puts a lot of things out of reach, such as the ability to afford medium- and big-ticket purchases.

It’s an endless loop—without enough credit, users can’t build up their credit score, and without high enough credit scores, loans get more unattainable.

AUTHOR

Bhumika Khatri

Bhumika covers e-commerce, consumer internet, and everything startup for The Ken in Delhi. In her previous stint at Inc42, she spent two and a half years writing about a breadth of startups and topics. A commerce graduate, Bhumika completed her postgraduate in journalism from the Indian Institute of Journalism and New Media, Bengaluru. You can reach her at [email protected]

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