In an exclusive conversation with Zee Business, Nalin Agrawal, CEO & Co-Founder, Snapmint, a finance company, highlights the concept of Buy Now Pay Later (BNPL) and also talks about the future of the segment. The management at Snapmint believes the BNPL category has huge potential to grow and talks about the RBI’s view on it.
The importance of the BNPL theme and the businesses connected to it. Describe your target numbers for the brands connected to your BNPL as well.
Snapmint is a point-of-sale financing company. We enable merchants to close transactions by extending easy EMI options to their customers. For merchants, it results in more customers and more sales. Many of these customers may have delayed/foregone purchase or would have otherwise settled for a discounted product.
For customers, it allows them to manage their monthly budget and expenses. For our merchant and brand partners, we end up contributing to over 15-20% of sales through our point-of-sale financing solution.
How is India developing as a market for BNPL players? What did you think of the pandemic and the aftermath?
BNPL or consumers taking credit to buy something is not a new phenomenon in India. Bajaj Finance has been the leading point of sale financier for over 15 years now. What’s changed now is the advent of digital tools, eKYC, UPI, and other rails which have broken the barriers and allowed millions of consumers to buy products of their choice in installments.
The pandemic has led to a boost in digital payment adoption and made more consumers comfortable with online transactions. Many offline merchants are also strengthening their presence online, and are looking to tap into new customer segments. Many consumers from outside metro cities are participating in the e-retail boom. At Snapmint, we see 70%+ of our customers are mass affluents from outside the metros.
Would you kindly explain the advantages of BNPL for different income groups?
If you look at consumer durable financing in India or for that matter globally, it’s targeted middle-class households, and globally it’s offered as a no-cost EMI product to these consumers. This allows the consumer to not only achieve their dreams but also manage their monthly cash flow without any extra cost.
Now, this same phenomenon is available online, and it has the same advantages for customers – manage your monthly budget, plan your expenses and still be able to buy what you want – now. The products continue to target middle-income consumers or what we call the mass affluent consumers of India who are buying online.
How is your business changing or benefiting from the BNPL for low-ticket items, especially those with no interest?
As I mentioned, our target customers are the mass affluent consumers. Their aspirations are big, and we hope to partner with them in their dreams. So to put it simply, they buy a whole range of products – from smartphones to home furnishing to gadgets and fashion. They can use Snapmint for any and all of these purchases, not just high-ticket items.
Our merchant partners see a 15%+ jump in sales through Snapmint, so they are more than happy to pass on this benefit to the customers from their marketing budgets which allows customers to save on interest costs. For us, happy merchants and consumers make for a great business.