BNPL adoption to grow at 12.2% CAGR during 2023-28
The Gross Merchandise Value ‘Buy Now Pay Later’ in the Indian market will increase from US$12.2 billion in 2022 to reach US$26.1 billion by 2028, according a report issued ResearchAndMarkets.com.
For this year, the BNPL payments are expected to grow by 20.5% on an annual basis to reach US$14.7 billion.
BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 12.2% during 2023-2028.
The buy now pay later space has grown significantly amid the growing traction for flexible payment methods among consumers in Tier II and Tier III cities of India.
The trend is expected to further accelerate over the next three to four years. The payment method has resonated with consumers across age groups and classes and has become the default payment choice for many in the country, it said.
Despite regulatory hiccups, consumer BNPL spending is expected to grow significantly in Q4 2022, largely due to the year-end festive and holiday season. The payment method is expected to increase its penetration in both the online as well as offline market, as consumers turn to flexible payment options amid rising inflation and cost of living.
Fintech firms are experiencing huge demand for BNPL services for both online and offline purchases
The Reserve Bank of India announced a slew of regulatory measures that have had a direct impact on the operations of BNPL players in India. Despite the regulatory hiccups, the sector is projected to record strong growth in Q4 2022, amid the rising demand for consumers.
LazyPay, ZestMoney, and KreditBee are among the many BNPL providers that have experienced high demand for their services in Q4 2022.
For KreditBee, the loan disbursement increased by more than 100% during the festive season in 2022, compared to 2021. Much of the demand for BNPL services was driven by consumers in Tier II and III cities in India.
The demand was not only evident for online purchases. Pine Labs, one of the leading fintech firms in the country, has witnessed a strong surge in the usage of BNPL services for offline payments. The firm had projected BNPL transactions worth Rs.50 billion in October 2022 alone. This represents a growth of 100% compared to any month on average.
To capitalize on the growing demand, the firm also announced a tie-up with 100,000 stores for BNPL services in October 2022. From the short to medium-term perspective, Pine Labs is expected to boost its presence in Tier III and IV cities across India, according to the report.
The BNPL market is led by Simpl, ZestMoney, LazyPay, Capital Float, PineLabs, Paytm Postpaid, OlaMoney Postpaid, Amazon Pay Later and Flipkart Pay Later. Fiinews.com
