'Buy Now, Pay Later' is New to India But Fast Catching Up Forget about credit cards, now smartphone apps offer you the privilege to pay at ease

It's the end of the month and you are craving for your favourite delicacy for dinner. You go online to place an order but unfortunately, the prices don't make you happy. You look at your empty wallet, feel dejected and resort to the same boring food you have every other day.

But what if, you had the option to just buy what you want but pay at ease? Forget about credit cards, now smartphone apps offer you the privilege to buy now, pay later.

India has recently a spurt in the growth of these start-ups which allow you to go for a movie, book railway tickets, order food online etc. without having to worry about your bank balance.

BIZ Experiences India spoke to founders of these start-ups about how the concept is becoming popular in India.

Thousands of Takers

With most transactions taking place online these days and rising interest rates of credit cards, the concept of buying now but having the option to pay later is gaining popularity. In case of emergencies, when one doesn't have enough cash on them, this option comes to their rescue.

Akshat Saxena, co-founder of Epaylater (they hit headlines when it bagged a contract with IRCTC to let users book tickets without having to pay immediately) believes that the fitment of this concept for Indian market is simply perfect, which explains the excellent traction it's been garnering. "We expect the momentum to continue, in fact only gather more pace," said Saxena.

The concept is definitely picking up and will continue to grow as typically, an online first customer is one who makes multiple online transactions each day – from food, groceries, online shopping, ticket booking and cab aggregators, said Pallav Jain, Head of Consumer Business, PayU which offers users to the option to pay later with the aptly named feature LazyPay. "While doing multiple transactions, the customer finds it time consuming to follow multiple steps each time for a payment. In such cases, a single-tap check out and the consolidated bill is the most attractive option to the customer," said Jain.

Jain goes on to share statistics from LazyPay's transactions which only prove that the concept already has many takers in India. LazyPay has about 250k users on board and they aim to target 10 million users on board in next one-and-a-half-year. They have also witnessed over 100%+ MoM growth. "We have received a phenomenal response with over 70,000 transactions and an average ticket size of INR 700," said Jain.

Targeting the Right Bunch

Being broke is the story of every millennial by the end of the month. It's also millennials who are more online-friendly and carry out most of their transactions online. So, they fit right into the target audience bracket for these start-ups.

The LazyPay feature is aimed at providing convenience to customers who transact digitally repeatedly in small value transactions on online portals. The targeted demographic is men and women in the age group 20-35 from metros.

Meanwhile, Saxena said that at Epaylater, they target both "online-first" and "first-online" customers. "While the former are ones who are frequent shoppers, the latter are the ones who aren't and also include those who are new to online shopping. Our value proposition helps reduce buyer inertia through convenience, credit and by "pay after delivery" features and this combination appeals to customers on either side," he said.

Partnership for Growth

Given the growing number of digital transactions, most experts believe that there's no stopping this feature. On the demand side, Saxena expects this product to become the preferred choice of transactions especially considering the demographic mix of the country. "Convenient credit offerings in other parts of the world have become really popular and we don't see any reason why India would be an exception. If at all, it would only be more pronounced here," he said.

While Epaylater has partnered with IRCTC, PVR, Croma, Goodbox, Zopnow etc., LazyPay has over 50 Merchants on board at the moment in categories such as food ordering, bill payments, travel, etc. Some of the top merchants on board include - Foodpanda,Redbus, Swiggy, Faasos, Aditya Birla Fashion, ACT etc.

Saxena believes that on the supply side, partnerships between entities should accelerate as that would allow the concept to create the multiplier effect. "We believe financial institutions should forge partnerships with company like ours to create the pan-stakeholder value," said Saxena.