Buy Now Pay Later: Not a passing fad but a necessity in the new normal

There is no denying the fact that today the spiraling cost of living in India is putting a pressure on the rising middle class in the country. In fact, Moody's Analytics recently put India's inflation at an "uncomfortable high" level. Amid such a scenario, novel ways would have to be put into motion by merchants in India to woo customers back to the stores. They were already reeling under the aftereffects of a prolonged lockdown and now customers not buying from them in this period of economic uncertainty and rising inflation could sound the death knell for such small and medium businesses in India. With Retail in India being the largest industry contributing to over 10% of India's GDP and 8% of employment1, India's retailers simply cannot fail.

At Pine Labs, we understand this predicament and therefore are quite upbeat about our tech-first Pay Later offering through which multiple credit issuing banks and leading brands on a single PoS terminal are offering exciting Buy Now Pay Later (BNPL) options to consumers at a merchant partner outlet. For shoppers, gone are the days of interacting with an in-person finance executive at a store, doing paperwork, sharing personal information, and then waiting to know whether they qualify for an EMI offer against the intended purchase. We have made the process quite a seamless one for the customer to avail Pay Later EMI offers with just a few taps of the PoS device. In fact, a Pay Later EMI transaction on a Pine Labs gets executed in less than 40 seconds. Customers are loving it!

The idea of paying a fraction of the cost upfront and the rest through interest-free instalments has many takers in India. From smaller purchases to luxury items and even automobiles, there is no dearth of options to choose from under the Pay Later EMI options and therefore it will continue to be an enticing proposition for shoppers in India.

Merchants, on the other hand have a new avenue to boost their sales. A survey2 that we did during the lockdown revealed that there were 72% retailers who were promoting EMI schemes at their outlet during the lockdown. Something that has translated into strong numbers as well if one looks at the fact that at Pine Labs, we managed to close transactions worth INR 2,000 crore from April 2020 to January 2021.

The future is bright for Pay Later in India as there are many bright spots to look forward to: A burgeoning internet subscriber base of over 560 million which is constantly being marketed newer products and a rising and aspirational middle class looking to upgrade their lifestyle to buy more yet save more as well. No wonder, India is set to become the third-largest consumer economy by 2025 as per a projection by Invest India.

We are now taking the India success overseas and entering new markets with our BNPL offering. Our most recent launch of Buy Now Pay Later in Malaysia reiterates our belief that Buy Now Pay Later is no passing fad but a necessity in the new normal.