Buy Now Pay Later transactions surge over 250% in Karnataka in 2021

Bengaluru: ZestMoney, Buy Now, Pay Later (BNPL) platform, revealed that the Karnataka region emerged as the top state last year in BNPL usage, outnumbering all the other states in India in terms of new customer sign-ups and transactions. On the back of solid demand, the platform noted that it saw a 2.5X increase in transactions, while the customer base of millennials and GenZ surged by 2X and 3X YOY respectively in Karnataka.

Most of the new customers on the platform were from the 24-27 years age group, demonstrating that young cohorts are driving the BNPL growth in the region. Bengaluru, Mysore, Belgaum, Kalaburagi and Kolar were the top five BNPL cities, while smartphones/electronics, lifestyle and fashion, Edtech, travel and home decor emerged as the top categories, ZestMoney noted.

BNPL, a short-term credit financing option that lets customers conveniently split bills at zero (or low) cost, has grown to become a preferred mode of payment, not just in tier-I cities, but also tier-II, II and beyond in Karnataka, the platform findings revealed. ZestMoney has serviced demand from 99.7% of pin codes in the state, the company added.

Interestingly, ZestMoney's findings also showed that Bengaluru women transacted more than their men counterparts compared to the other top BNPL cities. Data suggests that women used BNPL to upgrade their tech and electronics while also indulging in some fashion and lifestyle retail therapy. Men, on the other hand, went all out to spruce up their wardrobes and spent heavily on fashion, besides spending on electronics. Overall, the company said it observed a 2.5X YOY growth in women customers and 2X in men last year with customers taking to the flexibility, transparency and ease of pay-later options in a big way.

Commenting on the findings, Lizzie Chapman, CEO and Co-Founder of ZestMoney, said, "It is not surprising that Karnataka, which is in the forefront of writing India's tech and innovation story, has emerged as the top BNPL state in the country. With the digital way of life becoming the new normal globally, a large number of customers are choosing the ease, convenience, transparency, and cost-effectiveness of short-term credit tools such as BNPL over other formal credit means. In line with the global trend, millennials and Gen Z especially in India are seeing BNPL as a go-to credit-based payment option as it offers perfect flexibility to spread out costs and plan their finances better. Categories such as smartphones, Edtech, travel, fashion and lifestyle continue to top the BNPL purchases and see phenomenal growth, driving both numbers of customers and transactions higher on our platform. Our most popular 'Pay in 3' zero-cost offering is a huge hit, making us the leader in the category with 70% share in the online 'Pay in 3' market. We see tremendous headroom for the category to grow in India."

Chapman further added, "We are also seeing an increased demand for BNPL at offline stores. Customers from India's tech capital Bengaluru, who were earlier used to traditional EMI checkout network cards, are choosing digital products for ease and convenience. Keeping in mind the growing needs and varied use-cases in a heterogeneous market like India, we continue to work towards offering innovative products by combining the simplicity of digital payments with the benefits of pay-later offerings. We are also doubling down on further strengthening our offline store footprint, adding to our already-wide network of 75,000+ stores across the country. While Karnataka is already riding the BNPL wave, we, as the largest omnichannel player in the country, are confident that the proliferation of BNPL as a credit-based payment category will continue to grow exponentially in India in the coming years."

Bengaluru topped the list in the number of BNPL transactions across all categories. Cities that followed Bengaluru in top BNPL cities/towns include Mysore, Mangalore, Madikeri, Kolar and Kalaburagi in smartphone/electronics, Mysore and Kalaburagi in the travel category, Mysore in fitness, Ramanagar, Raichur and Kolar in electric vehicles, Dharwad, Mandya and Kolar in home decor, Tumkur, Belgaum and Bellary in fashion and lifestyle, and Mysore, Mangalore and Belgaum in Edtech categories.