Buy-now-pay-later mkt to surge by 10 times in 4 yrs

Hyderabad Buy-now-pay-later (BNPL), an interest-free credit system is gaining popularity among the online shoppers as it is expected to increase by 10 times within four years.

Redseer, a management consulting company, predicts that the country's BNPL market will boost from $3-3.5 billion(present) to $45-50 billion by 2026. It also forecasted that BNPL users in the country may rise to 80-100 million from 10-15 million of present.

Analysts at Macquarie Research, note that since the maximum credit currently being offered on BNPL is 1,00,000 rupees, which is much lower than the amount offered by credit cards, it will take some time before it can disrupt the cards market or wrest market share.

MobiKwik, a fintech firm sees BNPL business nearly doubling for the company in two years, in a country where hundreds of millions of people have little access to formal credit. The company which is among the top BNPL players in India and is backed by the Abu Dhabi Investment Authority, said income from the segment accounted for nearly a fifth of its 3.02 billion rupees revenue for the financial year ending on March 31.

"Only 60-70 million Indians have access to credit today, which means 93 per cent of India has no access to credit," said Upasana Taku, co-founder, MobiKwik. "It will become the fastest revenue driver for the business because there has been a 45 times growth in the BNPL transactions in the last two years. New user addition is very high; repeat rate and average ticket size is going up," she added.

As the pandemic sent more and more people towards online shopping, the demand for easy loans has driven more players to enter the BNPL market. Leading e-commerce firm Amazon joined the BNPL in 2020 while homegrown payments firm BharatPe started the service last month.