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Debit Card EMIs to drive retail sales post-pandemic
Debit Card EMIs to drive retail sales post-pandemic

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The pandemic has changed the way consumers access and consume products and services. As we try to adjust to the new normal and disruptions brought on by the pandemic, smart tweaks in business models are the need of the hour. Never there has been a higher focus on providing access and affordability in the realms of retail and this is where Pay Later comes into the feature. 'Buy Now, Pay Later' affordability proposition has proved to be a major player in bringing the sheen back to the market and propelling the growth trajectory.  Consumers’ reluctance in buying big-ticket items can be offset by no-cost EMIs. They don’t put a dent in their monthly budget or prompt them to part with their savings. When customers don’t have to pay an upfront amount for their purchase, their purchasing powers increase. Pay Later is not perceived as a loan but as periodical repayments at no extra cost. This change in perception is also one of the reasons for the growth of the Pay Later proposition in India.

A Goldman Sachs report1 has indicated that the BNPL segment in India is poised to grow exponentially by forming nearly seven per cent of total retail GMV. Pay Later has been proved to be one of the fastest-growing digital payment modes opted for by Gen Z and millennials. It is a customer-centric proposition and offers flexibility and transparency. It has emerged to be a viable lending approach during the pandemic and pundits are expecting it to be an attractive option post-pandemic too.

The debit card EMIs aim to provide an impetus to the massive adoption of Pay Later and increase touchpoints for Indian consumers. With the credit card penetration at a mere 5.5 per cent in India2, debit card EMIs can resuscitate the retail economy by generating demand for customers who don’t like to spend a lump sum account while shopping. The younger millennials and Gen Z are expected to hop on the trend and provide the much-needed economic momentum to the retail sector. People from tier-2 and tier-3 cities3 are expected to place their trust in the proposition, making it a promising bet for small-time retailers too.

So, given the asymmetry, it is only sensible for retail businesses to tap into the large segment of customers that rely on debit cards for their purchases.

By activating Pay Later on their PoS device, the retailers can gain customers, upsell and boost their profits, rerouting to their glory days once again.

The bottom line:

Pay Later EMIs are usually available at the point of sale for debit cardholders of major banks. Since the total bill is split into equal investments at no-cost EMIs, consumers don’t hesitate to buy products that they want. If a part of retail store strategy, Pay Later can prove to be a gamechanger for merchants and a surefire way to increase sales.

 

 

  1. https://www.hindustantimes.com/brand-post/what-you-need-to-know-about-bnpl-india-s-fast-growing-credit-option-101629092797492.html
  2. https://www.thehindubusinessline.com/money-and-banking/indias-credit-card-boom-faces-threat-from-payment-apps/article30128957.ece
  3. https://yourstory.com/2022/02/growth-buy-now-pay-later-industry-2022/amp

 


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