In a bid to strengthen its consumer-base in India, Bengaluru-based cab aggregator Ola has introduced digital credit payment service “Ola Money Postpaid”. This credit service was rolled out in 2018 in pilot mode and had recorded 30% growth month-on-month, the company claimed.
With an aim to provide a safe and quick payment experience, Ola Money Postpaid offers a 15-day credit line to the users. It will allow the users to pay for all their spending through Ola in one go, every 15 days.
According to Ola, users will be able to activate the credit service by themselves. After logging into the Ola application, users will get ‘Ola Money Postpaid invite’ button upon clicking on ‘Payments’ option.
A similar credit service is offered by PayU’s LazyPay. It offers a ‘buy now pay later’ option where users can avail small ticket credit of up to INR 30K ($420) for 15 days. According to the platform, it witnesses over 1 Mn transactions per month and receives around 8,000-9,000 applications per day for personal loans. In a statement, the company claimed to have disbursed about 6,000 loans to its users.
A similar initiative was also undertaken by Flipkart in 2017, when the ecommerce company launched a ‘buy now, pay later’ scheme, which allows users to purchase products from the ecommerce giant on credit.
Another notable player in the online credit space, ePayLater, raised an undisclosed amount in a pre-Series A funding round led by ICICI Bank, this month. Some of the other players in this space are LazyPay, Olly Credit, Ziploan, MyLoanCare among many others.
Ola Money PostPaid: Plans Ahead
According to Ola, the online credit service is currently being used by more than 10% of its users and the company has also seen repeat users for the service.
Buoyed by the success of the pilot, Ola said in a media statement, that it will be extending the postpaid services to all its customers in the coming months. It also plans on increasing the credit being offered and extend the billing cycle to 30 days.
In the near future, it will also look to onboard other merchants to develop a faster and easier payment mechanism. It also has plans to integrate the credit service into other segments such as food, entertainment and utilities in the coming months.
Founded in 2011 by Bhavish Aggarwal and Ankit Bhati, the ride-sharing company had forayed into the digital payment space in 2015 with the launch of its online wallet Ola Money which allows users to pay for their rides and also pay bills, transfer money to others and shop.
In order to develop the cashless payment system, it also launched Ola Credit in 2016, which allowed its users to pay for their rides later on. Under this, it offered user credit for seven days which could be availed by booking ola cabs.
With its latest initiative, the company is now looking to tap into the growing Indian online credit and loan market. According to a report by the management consulting group, Boston Consulting Group (BCG), the country’s digital lending market has the potential to become a $1 Tn opportunity in the next five years.
This announcement comes after recent reports which stated that Flipkart founder Sachin Bansal has invested $21.2 Mn (INR 149.9 Cr) as part of Ola’s ongoing Series J round through preference shares. However according to company sources who talked to Inc42, Bansal is said to have invested as much as $91.7 Mn (INR 650 Cr) in the cab aggregator.