With consumers now checking for offers and EMI (equated monthly instalments) options while making purchases, an option largely introduced by e-commerce giants, is now seen getting extended to EdTech and Healthcare sector, where there is a demand for these payment modes, says the report. Though online payments have dipped by nearly 30 per cent since the lockdown, things are picking up. Although over the last one month, digital payments industry saw a rebound of 23 per cent , consumers are looking at reducing the immediate burden of payments or aiming to save for now.
According to the report, virtual credit cards (pay later) option saw a 290 per cent increase in the last 30 days, the most preferred option for on-the-go, one-click payments, especially for the millennials. With an estimated user base for this mode of payment at around 50 million, Simpl, ePayLater and ICICI PayLater, are offering this option, among others. Consumers now also prefer to make payments via credits approved by the supported cardless EMI payment partners without any need for an actual credit or a debit card. With approximately 20 million active users, this payment option has seen a 178 percent increase in the last month. The other popular option of EMI payments is either through debit or credit cards. With approximately 50.3 million credit card holders against 840.6 million debit card holders in India, the report also points out that majority of the consumers who never had access to EMIs in the past because of not being a credit card user are now opting for debit card EMIs. With businesses now wanting to make their products/services more affordable for a much wider audience, including consumers in tier-II and tier-III cities, have also offered deferred payment options to debit card holders.
For digital payment users UPI continued to be the preferred mode of payment which saw 43 per cent growth in the last 30 days. "Small and medium businesses and consumers are beginning to realise the friction and frustration involved in handling cash after having experienced seamless digital payments," says Harshil Mathur, CEO and Co-founder, Razorpay. Although the government is pushing on digitisation, it may not be enough without intelligent innovations in financial transactions aimed at improving customer experience. "If fintech firms and banks re-examine their business models and choose to work together, I believe post this crisis we are likely to come out stronger," added Mathur.
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today