The Buy Now, Pay Later (BNPL) sector in India has seen a dramatic rise in adoption, with its share of e-commerce sales in the Asia-Pacific (APAC) region jumping from just 0.1% in 2019 to an estimated 5.8% in 2023, according to GlobalData. This rapid growth in BNPL usage is largely due to India's low credit card penetration and limited access to formal credit, alongside a flourishing e-commerce market that has fueled demand for BNPL services.
However, new stringent regulations by the Reserve Bank of India (RBI) have had a significant impact on the industry, forcing many fintech companies to reconsider their BNPL strategies. ZestMoney, a BNPL fintech backed by investors like Goldman Sachs, is planning to shut down in 2024, facing issues like high default rates and operational inefficiencies. Freecharge Pay Later has also been discontinued, signaling more shifts in the sector.
Some companies are pivoting to different business models in response. Paytm, for instance, is shifting its focus from its BNPL Postpaid service to higher-value personal and merchant loans. Similarly, Slice, originally a BNPL provider, has moved to offering prepaid credit cards and is merging with North East Small Finance Bank.
In light of these developments, the 2021 list of top BNPL players in India is being revisited to provide an updated look at the leading companies in this space for 2024.
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