BNPL services in India rise 21%, outperform global growth: Report

The report suggests BNPL has great consumer acceptance and facilitates financial inclusion, given that businesses must follow fair practices and conform to regulatory guidelines.

This comes as the Reserve Bank of India (RBI) is taking a closer look at the lending practices by fintech firms and has stepped up the scrutiny to regulate the sector. Recently, the RBI threw the
industry in a tizzy after it barred prepaid payment instruments (PPIs) from being loaded through credit lines.

Although BNPL still lags behind credit card payments and mobile wallets, the report notes that the awareness of BNPL and its uses is rising, particularly among higher-income households, suggesting it is on the verge of becoming mainstream.

57% of the respondents to an Experian poll indicated BNPL might replace their credit cards.

Experian surveyed 6,000 consumers and 2,000 businesses across 20 countries, including India, the United Kingdom, the United States, and other Asia Pacific markets, exploring the significant shifts in consumer digital preferences towards payments.

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“India is moving towards building a strong digital ecosystem, where consumers can use digital solutions and services to effectively manage their finances. Businesses need to consider meeting the ever-changing demands of consumers while embracing technology and innovation at scale,” Neeraj Dhawan, country manager, Experian India said.

“A friction-free and secure digital experience will go a long way towards gaining consumer trust and loyalty,” he added.

According to the study, 91% of Indians preferred online payment methods for financial transactions, the research claims, with digital payment volumes surpassing credit cards.

With the increase in online transactions, 29% of the consumers have fallen prey to their credit card or payment details being stolen, in the past. As the focus shifts towards cybersecurity, 60% of the consumers, who participated in the survey, said they were concerned about fake or phishing emails, messages, and phone scams.

Globally, even as BNPL continues to show growth in adoption, players have been engulfed in the “funding winter”, amid a slowdown in technology stocks. Earlier this week, Swedish BNPL major
Klarna raised $800 million at a valuation of $6.7 billion, an 85% valuation erosion from its previous market value of $45.6 billion.