Pay later platform LazyPay, an arm of Prosus-backed fintech major PayU, on Monday launched a buy now pay later (BNPL) card that can be used at offline stores. The company, which currently has 3.5 million active users on its platform, said that it is looking to have 1 million consumers for its card product in the next one year.
“Nearly 60-65 per cent of our BNPL customers do not have access to credit cards because of different reasons like low penetration of banks and insufficient credit bureau scores. This is not the only important target audience for the product. We also have a database of 62 million pre-approved user base who can avail a credit line of up to Rs 5 lakh through the product,” said Prashanth Ranganathan, CEO, PayU Finance.
Ranghanathan said that the BNPL business is on track to break even in the next few months, given its low NPAs. “We have two revenue lines – the merchant discount rate and the late fine which we do not really look at as revenue as it is a way to prompt customers to pay on time. It has been a tough balancing act to reach this point,” he explained.
The BNPL platform said it is on track to grow three-fold in monthly disbursals to Rs 300 crore in January on a year on year basis. The aim for this year is to clock an average of Rs 450 crore of monthly disbursals.
“Given that the revenue stream is not very big, our aim is to offer products like insurance and wealth management to our customers over the next few quarters. While most fintech companies come to credit via payments or neobank products, we started our journey from credit and that is what gives us an edge,” said Ranganathan.
He said that there won’t be much of a differentiation between fintech companies like Slice, Uni, Jupiter and others coming up with BNPL cards. “What sets us apart is that we have developed a tried and tested model of offering a credit line to Tier 2 and beyond customers – whereas our peers are mainly catering to Tier 1 customers who already have a credit card,” he added.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU