SUMMARY
WhatsApp Payments is yet to get NPCI's approval to launch in India
Amazon Pay Later offers a credit line for essential purchases and bill payments
DataLabs by Inc42 projects India's credit demand to rise over $1.41 Tn by 2022
Even though WhatsApp Payments is yet to take off in any meaningful manner and has not received approval for a full rollout in the Indian market, the Facebook-owned digital payments platform is looking to enter the loans and lending market soon.
As per the ministry of corporate affairs filing, WhatsApp Payments has listed credit as one of its business plans for India. Besides lending, no other financial services have been listed in the filings accessed by TechCrunch. It’s not yet clear whether WhatsApp would be offering personal loans to consumers or providing credit for customers looking to fund purchases through its payments platform.
The news comes to light a few days after WhatsApp reached out to the National Payments Corporation of India (NPCI) assuring that its payments platform will be compliant with all local data protection and storage regulations by May. Interestingly, even though NPCI had reportedly approved the phased launch of the WhatsApp Payments in February, it was immediately retracted due to compliance issues and the controversies around it. NPCI had reportedly asked the company to be with all Reserve Bank of India (RBI) regulations, before seeking approval.
Amazon Pay Later Makes An Entry
Meanwhile, Amazon has expanded its Pay Later credit offerings to the Indian market. Through this, the company is offering customers a zero-interest credit to its customers in India to buy essential products or to pay bills. Amazon Pay has partnered with lenders such as Capital Float and Karur Vysya Bank.
The service should bring some relief to customers who have had to stretch their budgets during the Covid-19 crisis, said Vikas Bansal, director of emerging payments at Amazon. Customers will be liable for credit lines of up to INR 15K, which can be paid after 45 days of availing the loan.
“In the older product [that was] Amazon Pay EMI, you could only use it for installments for buying big-ticket purchases… But what we’ve done now is we’ve upgraded that to Amazon Pay Later, where customers can either use it for their small-ticket purchases, for payment experience or convenience or continue to use this for the large ticket purchases and pay in installments,” Bansal told Gadgets 360.
Amazon’s rival Flipkart has also introduced a similar feature for an instant credit line of up to INR 5,000 at zero additional cost for up to 40 days. Other microlending and pay-later platforms like LazyPay offer services through over 250 websites and apps for a credit limit of up to INR 1 Lakh.
Lending Set For Boost In India
As per DataLabs by Inc42 estimates, the credit demand in India is projected to be worth $1.41 Tn by 2022. The estimated growth rate in credit demand is 3.73% between FY17 and FY22. However, the Covid-19 crisis is said to be an unprecedented boost to the lending space in India.
Paytm founder Vijay Shekhar Sharma, talking at the ‘Ask Me Anything’ webinar hosted by Inc42, highlighted that lending is one of the biggest opportunities which comes out of these times. “Companies that swing around to the opportunity of distributing unsecured loan and collecting them well, and underwriting them well will become the champions of tomorrow,” he added.
