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Buy now and pay later

Banks seeking long-term growth should explore market entry, and merchants should reassess their financing offers. Trends fuelling growth include digitization, rising merchant adoption, increasing repeat usage among younger consumers, and an expanding set of players targeting lending at point of sale, a service also known as “buy now, pay later.” Thus far, fintechs have taken the lead, to the point of diverting $8 billion to $10 billion in annual revenues away from banks, according to McKinsey’s Consumer Lending Pools data. It is observed that only a few banks are responding fast enough and boldly enough to compete. Banks that underestimate the threat may see continued loss in share and could lose out on participating in a growing value pool and gaining share among younger and new-to-credit customers, as banks in Australia and China did when facing a similar situation. To avoid that outcome, US banks need to understand the landscape for POS financing and choose from among the emerging models. In India, as the Covid-19 pandemic has sent more and more people towards online shopping, the demand for easy loans has driven more players to enter the Buy Now, Pay Latermarket. Experts say, Since the maximum credit currently being offered on BNPL is 100,000 rupees, much lower than credit card offers, it will take some time before it can disrupt the cards market.



Buy Now, Pay Later products are not new to the Indian market. BNPL is a powerful tool that supplements the consumerism boom, with the aim of providing a digital credit card experience and brings into its fold even those left outside the structured financial system. India's buy-now-pay-later (BNPL) industry is booming and set to surge over ten-fold within four years as tens of millions of online shoppers get lured by interest-free credit with fewer hassles. As per the estimates of Redseer India's BNPL market will .