As Mobile Wallets battle regulatory hurdles, startups are now eyeing buy-now-pay later mechanism to soar on their revenue margins.
Industry watchers say that mobile wallets which originally operated as a single click checkout platform for online commerce are slowly heading towards a tab system where consumers can purchase products in simply one step and pay in bulk later.
The success rate for transactions made under this process is accurate by 99 per cent which comes as a major puller for e-commerce companies, claims the experts.
Nityanand Sharma, co-founder of Simpl says that his product utilises the legacy khata system wherein the merchant maintains a notebook and the consumer would pay in bulk at the end of the month.
“The practice of keeping a ‘tab’ is an old tradition in India and permeates from large cities to small towns and villages. We want to build Simpl as a mass-market product in that fashion based on people’s trust,” said Sharma.
‘’Mobile wallets could hardly offer a single-click checkout option because in more than 80% cases a consumer would need money to be added to the wallet during the purchase. A product like Simpl, on the other hand, offers the true single-click checkout option,’’ added Sharma.
Speaking in a similar tone, Jitendra Gupta of LazyPay, adds, ‘’Buy-now-pay-later is a typical credit product for consumers who are otherwise not eligible for a credit card. This helps e-commerce companies serve those who might not have a credit card but the purchasing capacity.’’
“A top food delivery startup told us that loyalty of customers using LazyPay is much higher and their stickiness is also growing. Merchants look at entities like us from a convenience factor, but a consumer looks at it both as a convenient payment option as well as a credit card replacement,” added Gupta.
Gupta also claims that about 70 per cent of the repayments on LazyPay are occurring debit cards, net banking or Unified Payments Interface(UPI) which reflects that consumers do not have access to credit cards.
“What wallets targeted initially, pay-later products can successfully achieve. It can convert cash-on-delivery purchases into digital payments. Consumers here get the product delivered and pay later when the bill is due,’’ says Aurko Bhattacharya, co-founder of ePayLater, a Mumbai-based startup working in the same space.