No-cost instalments: outdated or popular? :- www.deekpay.com

The Indian consumer market has historically been conservative, with a balance between large and small purchases. However, recently there has been a significant change in the buying behaviour of Indian consumers due to the emergence of no-cost instalments as a payment method. The main reason for this change was the outbreak in the subcontinent in early 2020. With the spread of the epidemic, India witnessed a large number of pay cuts and layoffs. This made many products and services out of reach for consumers. Not only that, but the prolonged epidemic almost turned many utility goods into luxury items simply because they became unaffordable.

Needless to say, this has had an impact on sales for numerous brands and industries. For example, despite a surge in demand for electronic appliances, sales in the consumer durables industry fell 30% in 2020 compared to 2019.

Against this background, there is an urgent need to increase the purchasing power of the general public. Consumers need to be able to afford to buy both large and small quantities of goods according to their needs, not just based on purchasing power. This has led to the creation of what has now become the preferred method of payment for most buyers: no-cost instalments.

What are no-cost instalments?

In simple terms, EMI stands for Equal Monthly Installment. As you can see from the full name, EMI means that the borrower pays a fixed monthly payment to the creditor on a fixed date every month. As for no-cost instalments, this is an offer where you pay only the price of the product to the EMI provider and spread it evenly over the repayment period.

For example, if you have purchased a Smart TV worth Rs 60,000 but are unable to pay the entire amount at the time of purchase, you have the option to spread the total amount over a fixed number of months and then pay the apportioned amount on a fixed date every month until the total cost of the product purchased has been paid. However, you do not have to pay any additional amount over the original price as interest. This is what makes no-cost instalments so attractive to most buyers!

Growth of no-cost instalments in India

With most of the online business platforms offering EMI as a payment option, more and more consumers are opting for it. In 2020 alone, the total EMI processing recorded by Ezetap surged by 2,201 TP3T.

Due to the complete waiver of interest to the consumer in no cost instalments, it has become the most popular option. Here are some of the reasons why no cost instalments are gaining popularity among consumers:

It is wallet friendly and keeps your liquidity available for a month. Consumers can control the amount they need to pay each month by choosing the total amount they wish to repay over the term. Consumers do not have to pay any additional amount apart from the price of the product.

No-cost instalments become the norm

It is safe to say, therefore, that despite the epidemic driving the emergence of no-cost instalments, Indian buyers are now accustomed to this method of payment. What was originally seen as a short-term solution to boost sales in the midst of an economic slowdown and global health crisis is now becoming part of the basic buying behaviour of Indian shoppers. Therefore, we can safely conclude that no-cost instalments are not obsolete but are here to stay for a long time.

It is important to note that with the growing reliance on no-cost instalments by Indian buyers, businesses also need to adapt their payment methods to offer no-cost instalments to consumers. No-cost instalments are now key to boosting conversions and generating profits for businesses. So, if you are a business owner looking for measures to drive sales, here is a formula you can use immediately.

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common problems

Can my customers avail EMI payment discount at the time of checkout? Yes, they can. Find out more.

Can I enable No Cost Instalment on PayU? Yes, you can enable costless instalments on select banks like SBI, ICICI, HDFC etc.

Do EMI options vary from bank to bank? Banks offer different convenient EMI payment options to their customers. For example, the total purchase amount can be divided into 24-month, 12-month, 6-month and 3-month EMIs. therefore, EMI options vary from bank to bank.