Diwali bonanza for BNPL platforms as disbursals grow by more than 100%

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The buy now pay later (BNPL) juggernaut continued to grow bigger during the festive season as multiple players said that they saw disbursals grow by more than 100 per cent compared to Diwali last year. LazyPay, the BNPL platform of Prosus-owned payments major PayU, saw credit demand rise 300 per cent over the festive season last year, especially in segments like travel, food & beverages and entertainment. “We also saw an uptick of 70 per cent in user acquisition in the last two months. Around 60 per cent of the demand is from tier-2 and tier-3 cities, specifically outside of the top 10 cities in India, while the average age of consumers is 26-27 years,” said Anup Agrawal, business head at LazyPay. Uni, a BNPL company started in June this year by PayU founder Nitin Gupta and Prateek Jindal, former CEO of Ola Financial Services, saw more than 100 per cent increase in transactions, both in terms of volumes and value during the festive season. “We are currently doing more than Rs 100 crore of monthly disbursals and the peak spend per day in the season was 200 per cent higher than the average,” said Uni’s Jindal. “We added 5X new customers in October compared to last year. In October alone, we crossed the gross merchandise value we did in the entire festive season last year. We are on track to hit $1 billion in GMV this financial year,” said Lizzie Chapman, CEO and co-founder of Bengaluru-based pay later start-up Zest Money which counts Goldman Sachs, Xiaomi among its investors. However, it is not pure-play fintech start-ups who are riding high on the BNPL wave. In September, ahead of the festive season, had raised the credit limit of its pay later service from Rs 10,000 to Rs 70,000 which a customer can pay back as equated monthly installments (EMIs) over a period of 12 months. This led to nearly a 4X jump in the number of transacting customers using Pay Later and over 1 million customers opted for the facility for their purchases during the Big Billion Days sale, a company spokesperson told Business Standard. “India is traditionally a credit averse market and the Coronavirus (Covid-19) pandemic’s impact has increased reliance on credit solutions. Access to credit is a key unsolved need for Indian customers who want to manage their expenses, while also fulfilling their aspirations,” the spokesperson added. E-commerce major Amazon also has its own pay later service.

The company did not respond to queries on its pay later service’s performance during the festive season.

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