According to a new report released, the buy-now-pay-later (BNPL) industry in India’s fintech space is expected to reach $40 billion by 2025.
According to management consulting firm Redseer, this fintech subsegment, which witnessed 9 times financing growth and massive adoption in 2021, is growing at a 65% (on-year) rate.
Simpl, Lazypay, Zestmoney, ePayLater, Flipkart, Paytm, PhonePe, and Amazon India are the companies and fintech platforms that have jumped on the BNPL bandwagon.
“The majority of consumers use BNPL frequently, have good usage hygiene, and usually pay on time. However, there are some consumer experience areas to be solved to drive higher average revenue per user (ARPU)/customer lifetime value (LTV) from the existing user base,” said Mrigank Gutgutia, Associate Partner, Redseer.
A higher credit limit, cash withdrawals, increased user convenience, and more merchant tie-ups are just a few of the key areas that need to be addressed.
“Regulations will also be key as several nations have started to regulate BNPL to protect users and reduce defaults, while India is still in the nascent stage,” Gutgutia noted.
Multiple products and business models are emerging in India’s BNPL ecosystem, owing to the country’s different BNPL users and ecosystems.
“Close to 73 percent of this segment use BNPL for online shopping. Companies are actively trying to diversify their use cases with wider merchant partnerships,” said the report.
