Report Overview

The rising e-commerce industry in India and growing population of millennials and Gen Z are projected to propel the expansion of the India Buy Now Pay Later (BNPL) services market during the forecast period between 2023 and 2029.

India Buy Now Pay Later (BNPL) Services Market - Industry Trends & Forecast Report, 2029

India Buy Now Pay Later (BNPL) services market size was estimated at USD 1.1 billion in 2022. During the forecast period between 2023 and 2029, the size of India Buy Now Pay Later (BNPL) services market is projected to grow at a CAGR of 23.1% reaching a value of USD 4.6 billion by 2029. Major growth drivers for the India Buy Now Pay Later (BNPL) services market include an increasing e-commerce momentum, growing high popularity and adoption of digital payment trend, and entry of millennials and gen Z into workforce. The burgeoning Buy Now Pay Later (BNPL) market in India stands as a global exemplar of rapid growth. As the consumer landscape progressively transitions toward online payment avenues, the embrace of BNPL as a payment mechanism has witnessed a remarkable upsurge within the nation during the preceding biennium. Notably, a report by Experian highlights that BNPL transactions in India escalated by a substantial 21% in the first half of 2022, surpassing global growth by an additional 3%. While this deferred payment modality is still overshadowed by mobile wallets and credit cards, the escalating consciousness and mounting utilization, notably within higher-income households, signify an imminent integration of this payment approach into the mainstream fabric of the nation. As India persistently advances towards the fortification of a robust digital ecosystem, the foreseeable trajectory for the BNPL market remains highly promising in the medium to long-term horizon.

India Buy Now Pay Later (BNPL) Services Market – Overview

India Buy Now Pay Later (BNPL) system is a payment mechanism enabling customers to make purchases, whether online or in physical stores, without the immediate requirement of paying the full upfront sum. The growth of this market is propelled by the ongoing digitization, wider merchant acceptance, escalating patronage among the younger demographic, and the emergence of fresh enterprises providing financing via BNPL services. Particularly appealing to younger consumers, BNPL services offer a range of benefits, encompassing the ability to acquire high-value items like laptops and smartphones, as well as facilitating payments for everyday essentials such as stationery products.

India Buy Now Pay Later (BNPL) Services Market

Growth Drivers

Booming E-commerce Sector in India

The inception of India's Buy Now Pay Later (BNPL) model has sparked substantial discourse. Positioned as a transformative solution for minor credit transactions, it's rapidly becoming the favored payment method among millennials. With a remarkable annual growth rate of 22.9%, the microfinancing model thrives particularly in tier 2 and tier 3 cities, projected to reach around USD 14,000 million by 2024. The thriving E-commerce sector in India acts as a potent catalyst for the burgeoning Buy Now Pay Later (BNPL) services market. This symbiotic relationship gains momentum from the convenience-seeking behavior of modern consumers on online shopping platforms. The flexible and deferred payment options of Buy Now Pay Later (BNPL) services align seamlessly with this trend, boosting customer satisfaction. Collaborations between E-commerce platforms and Buy Now Pay Later (BNPL) providers intensify this synergy, fostering a dynamic growth ecosystem. As India's E-commerce sector continues its upward trajectory with diverse products and heightened consumer engagement, the Buy Now Pay Later (BNPL) services market is expected to reap significant benefits from this association. This intriguing dynamic underscore the symbiotic relationship between India's thriving E-commerce sector and the burgeoning Buy Now Pay Later (BNPL) services market.

Restraints

Regulatory Concerns around BNPL Services

The growth trajectory of the India Buy Now Pay Later (BNPL) services market faces growth constraints due to regulatory uncertainties. Regulatory concerns surrounding BNPL services have led to a cautious approach, potentially affecting market expansion. Market players are prompted to navigate these challenges while seeking innovative solutions to ensure compliance and foster sustainable growth in the BNPL sector.

Impact of COVID-19 on India Buy Now Pay Later (BNPL) Services Market

COVID-19 pandemic had a positive impact on the India Buy Now Pay Later (BNPL) services market. Initial disruptions were followed by a rapid acceleration in digital adoption, including the utilization of BNPL services. Online shopping surged as consumers sought convenient solutions, boosting the prominence of BNPL as a payment option. Economic uncertainties during the pandemic heightened the attractiveness of deferred payments. Market participants swiftly adjusted, extending BNPL services to brick-and-mortar stores. This adaptability underscored the market's resilience. The pandemic's influence underscored the importance of flexible payment methods, positioning the India BNPL market for ongoing expansion as consumer behaviors evolved in the post-pandemic context.

India Buy Now Pay Later (BNPL) Services Market

Segmental Coverage

India Buy Now Pay Later (BNPL) Services Market – By Channel

By channel, the India Buy Now Pay Later (BNPL) services market is bifurcated into Online and Point of Sale (POS) segments. The online channel segment holds a higher share in the India Buy Now Pay Later (BNPL) services market during the forecast period by channel. In aiding the expansion endeavors of small and medium-sized enterprises (SMEs) in India, multiple entities, including B2B e-commerce establishments, have ventured into the Buy Now Pay Later (BNPL) domain, a segment that has garnered increasing favor among both consumer and business circles. Consequently, these entities are actively securing funding rounds to extend their B2B BNPL services across a broader spectrum of enterprises in India. As India's e-commerce sector surges towards a USD 100 billion milestone, attributed to digitalization and accessible internet, the digital sales landscape has flourished. Buy Now Pay Later (BNPL) has emerged as a preferred transaction mode, poised to encompass 14% of e-commerce transaction values in the coming years. The diverse e-commerce platform encompasses groceries, electronics, FMCG, home furnishing, and more. During H1 2022, the platform achieved a robust gross merchandise value (GMV) of over USD 260 million, bolstered by a remarkable 60% average repeat purchase rate.

India Buy Now Pay Later (BNPL) Services Market – By Enterprise Type

Based on enterprise type, the India Buy Now Pay Later (BNPL) services market is split into Large Enterprises and Small & Medium-sized Enterprises (SMEs) segments. The large enterprises segment held a higher market share during the enterprise type. It can be attributed to their substantial resources, established brand recognition, and broader customer base. Large enterprises often possess the capacity to invest in and effectively implement Buy Now Pay Later (BNPL) services, thereby attracting a larger customer pool. Their existing customer trust and financial stability offer a conducive environment for the adoption of BNPL, positioning them as leaders in leveraging this payment solution to enhance customer experience and foster sales growth.

India Buy Now Pay Later (BNPL) Services Market – By End User

Based on end user, the India Buy Now Pay Later (BNPL) services market is divided into Consumer Electronics, Fashion & Garment, Healthcare, Retail, and Media & Entertainment segments. The healthcare segment held the highest share in the India Buy Now Pay Later (BNPL) services market by end user. Indians annually expend substantial sums on health and medical expenses. With a majority of people lacking insurance, these costs are covered by personal savings. To address this, numerous Buy Now Pay Later (BNPL) startups are entering the healthcare sector. QubeHealth, offering deferred payment healthcare products, has partnered with firms like Tavant Technologies and SmartWorks. Their QubeHealth-Card aids employees with expenses not covered by company health insurance. Another player, SaveIN, also focusing on healthcare, is rapidly expanding in India. This trend addresses the need for flexible payment solutions, reshaping how healthcare expenses are managed and financed in the country.

India Buy Now Pay Later (BNPL) Services Market – By Region

Regionally, the India Buy Now Pay Later (BNPL) services market is divided into North India, South India, East India, and West India.

Competitive Landscape

Major players operating in the India Buy Now Pay Later (BNPL) services market include Sezzle, ZestMoney, LazyPay, Paytm Postpaid, SlicePay, Capital Float, EarlySalary, Amazon Pay Later, Razorpay, and Simpl. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In July 2022 - The Reserve Bank of India imposed a prohibition on loading prepaid payment instruments with credit limits, which raised concerns within the swiftly expanding BNPL sector in India. Although the immediate repercussions of this declaration are anticipated, the controlled BNPL landscape is envisioned to drive heightened innovation in the industry, as stakeholders strive to formulate more advantageous remedies to address prevailing gaps within the sector.

Scope of the Report

By Channel

• Online

• Point of Sale (POS)

By Enterprise Type

• Large Enterprises

• Small & Medium-sized Enterprises (SMEs)

By End User

• Consumer Electronics

• Fashion & Garment

• Healthcare

• Retail

• Media & Entertainment

By Region

• North India

• South India

• East India

• West India