BNPL makes a comeback as payment apps try to fix its broken economics
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Payment apps are bringing back buy now, pay later services in India to fix broken economics.
- ✓Firms like SuperMoney and POP now offer small loans for shopping.
- ✓"The customer seeking credit is increasingly a young shopper buying shoes, apparel or protein supplements," said CEO Bhargav Errangi about the new trend.
Story at a Glance
- Category
- Indian Markets
- Reported By
- mint
- Reading Speed
- 5 Minute(s)
- Market Focus
- India Economy
Summary
The latest proposition combines payments, shopping and credit: acquire customers through UPI, finance their purchases and use repayment behaviour to assess them for larger loans.
Payment apps that run their own shopping stores are reintroducing buy now, pay later (BNPL) in India.
E-commerce platform Flipkart-backed SuperMoney and fintech Razorpay-backed POP are allowing young, often first-time borrowers to buy sneakers, skincare products and gadgets in instalments, initiating longer credit relationships through small shopping loans.
POP gives users what founder and chief executive officer (CEO) Bhargav Errangi calls a "sachet limit" -- a small revolving credit line. "The customer seeking credit is increasingly a young shopper buying shoes, apparel or protein supplements, rather than financing higher-priced goods such as smartphones or televisions. We keep ticket sizes small," Errangi said.
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