Are ‘Pay Later’ Services Seen As an Alternate to Credit Cards in India?

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‘Buy now, Pay later’ was introduced as an interesting idea some time back with limited merchants, but soon it got popular and widely accepted by many merchants. The idea took its root from reducing the dependency on cash on delivery, which is by far the most favored option in e-commerce. In addition to reducing this dependency, it also provides a small line of credit and that too interest-free for few days. Thus, this alternative provides the consumers with three C’s, which are credit (which is interest-free for few days), convenience and cashless transaction.

The e-commerce industry came into existence and flourished only on the principle of providing convenience and choice to its consumers. While it succeeded in providing the choice and convenience in choosing goods, when it comes to making the payments, it somehow lost its way. What it offered was either card payments or cash on delivery. The pay later option came as a fresh breeze opening up a wide array of options.

As we know, credit cards could not penetrate deep in our country. The easy credit online is trying to capture the market that never became a part of the credit card industry in the country.

According to the co-founder of ePayLater, Aurko Bhattacharya, “Ours is a cash-driven economy, accounting for at least 68 percent. In the US, it is at 9 percent. On the other hand, US has over 48 percent population using credit cards, against just 3 crore credit cards in India. To get people to move away from cash, you need to give them a fitting alternative which will be frictionless.”

Go Cashless with ‘Buy Now, Pay Later’

This option is like providing micro-credits to the consumers for 14 days free of interest. The user can buy a product and use it before paying up for it. The Indian government also wants people to move away from cash transactions and go cashless. For creating this digital economy, solutions like ‘buy now pay later’ provide propositions of utility value for the consumers and they are motivated to shift away from making cash transactions.

No Budget Constraints

The e-commerce firmsalso love this proposition as they see an opportunity in it to arrest sale-related losses. According to data, nearly 70% of the people who fill their virtual shopping carts abandon it just before making the payment. This is a huge number and a big failure on the part of the e-business model where companies make loads of effort in targeting the right audience, diverting them to their website, and making them go through their products and adding them to the shopping cart. All this exercise turns futile if the user abandons that cart and moves away.

Often it is the budget constraint that instigates people to abandon it. With buying now and paying later, many of these feel that there is no immediate obligation to pay and they make the sale. Once the product arrives, they can see and use it and once satisfied they can make the payment.

Increased Security

Another benefit of using the ‘pay later’ services is that users can conclude their transactions with just a tap without the need to either log into their bank accounts or enter their 16-digit card number. As there is no third party payment portal like payment gateways involved, there is increased security and much higher transaction success rate.

Using these services provides the benefits of ‘cash on delivery’ along with a seamless checkout experience. There is absolutely no need to handle in cash when the consignment arrives. All you need to do is receive it and use it. These ‘pay later’ service providers also reward their clients with discount vouchers for making timely payments. Using these vouchers make the subsequent purchases even more economical.

The ‘pay later’ option is also getting popular due to the security factor. In this, you don’t give out any details regarding your bank account or credit card number on the e-commerce payment portals.So, there are no chances of account hacking and phishing. Thus, there is added security in making your transactions by using ‘pay later’ mode.

‘Buy now, pay later’ is an innovative solution that is sure to make the online shopping still more convenient and comfortable. Ithas the potential to take up the business that the credit card industry always strived for.

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