India's Native Payment Gateway: The Potential of BNPL in India and Why You Need It to Ensure a Worry-Free Future for Your Business

Globally, BNPL services are highly sought after due to its multiple benefits. Firstly, neighbouring countries such as Vietnam and Singapore have seen a significant rise in interest in BNPL services, with Vietnam seeing a five-fold increase in search intent and Singapore seeing a two-fold increase between September and December 2021, an increase compared to the same period last year.

India is also expected to see a significant increase in BNPL adoption, thanks to the growth of e-commerce and its symbiotic relationship with credit models such as "buy now, pay later".

In this article, we will discuss the importance of adopting BNPL by organisations in order to make their own future hassle free.

Potential of BNPL India

The country is moving towards building a robust digital ecosystem. Many consumers use digital solutions and services to manage their finances. Therefore, every business must meet the changing needs of its consumer base while embracing technology and innovation.

In the Experian Global Insights Report: April 2022, it was noted that BNPL transactions in India grew by TP3T in the second half of 2021, compared to the global average of TP3T.181 TP3T. The report also noted an increase in consumer acceptance of Buy Now Pay Later (BPPY) services and BNPL companies, as well as an increase in financial inclusion. has increased.

In terms of numbers, the Indian BNPL loan market currently stands at around $3.5bn, with around 10 million consumers adopting it. It is expected to reach a valuation of $50bn by 2026, with the number of consumers growing six-fold to 100m.

BNPL in India can be used as an alternative source of credit in a credit-starved economy. It is fast becoming a major influence on e-commerce shopping as more and more people embrace its utility. As such, it is emerging as a viable alternative to the lending ecosystem in India, especially for those who would otherwise not have access to financial assistance.

BNPL services: a key enabler to ensure a worry-free future for your organisation

"Buy now, pay later" services are seen as a key way to ensure a worry-free future for businesses. Here are some of the specific reasons why:

Reduce shopping cart abandonment

Shopping cart abandonment has always been a pain point for e-commerce businesses and many times, the reason is that consumers lack the funds to complete their purchases. However, with the BNPL card, consumers can pay more conveniently and in easy instalments, which will motivate them to complete their purchases more frequently.

Increase sales

BNPL is changing the mindset of consumers to buy goods only when they are comfortable with the payment process. With the convenience of instalments and on-demand payments, more and more consumers are expected to join the bandwagon, thereby driving e-commerce sales.

Increase average customer lifetime value (CLV)

For e-commerce brands, Customer Lifetime Value is crucial. If you search online, you will find a plethora of statistics showing that BNPL is improving the credit profile in India and driving CLV growth with minimal increase in risk.

summaries

As an economy, India is on the eve of a credit revolution. As more and more affordable credit services, such as BNPL, threaten the existence of traditional systems, such as credit cards, we expect their adoption to grow exponentially in the coming years.

But for merchants to be a part of this revolution, they need reliable partners to help them scale their business. We at PayU India are a leading payment gateway that can set up and manage the BNPL process efficiently.

Click here to contact PayU India.

Frequently Asked Questions

Can BNPL loans in India overtake credit cards?

Currently, BNPL lags behind credit cards and mobile wallets in terms of transaction volumes; a Goldman Sachs report states that it is expected to be the fastest-growing online payment method during the 2020-2024 period, with its market share doubling from 3% at the beginning of the period to 9% at the end of the period.

Is BNPL good for merchants?

BNPL offers many advantages to merchants such as increased orders and customer lifetime value. In addition, it helps to increase customer loyalty, making it an excellent addition to a business.