Buy Now Pay Later (BNPL) is making waves globally, bringing about a shift in the purchasing habits of people. The COVID-19 pandemic has fuelled this shift. The availability of low-cost or zero-cost EMI options has helped many people afford essential purchases, despite a decline in spending power during the pandemic.
BNPL In The Indian Education Sector
The massive rise in internet penetration and simplified access to innovative technologies had already propelled the online education sector pre-pandemic. COVID-19 accelerated this growth at an unimaginable rate. After the US, India is the second-largest market for e-learning, expected to reach a market size of $1.96 billion in 2021 and grow by $2.28 billion during 2021-2025.
However, the pandemic also revealed vast inequities in access to online education. Students from low-income families cannot afford devices that allow access to at-home online curriculums. Apart from the digital divide, many parents might not be able to afford education for their children in the wake of job losses and salary cuts. The BNPL model could be the answer to such challenges, offering better access to education for students even in the remotest corners of India.
Fintech companies are now partnering with leading educational institutions and Edtech platforms to enable flexible payment solutions for students and parents. While most schools and colleges demand fees in lump-sum amounts, these partnerships enable institutions to allow people to pay course fees in smaller, cheaper and convenient instalments, usually at zero interest rates.
In a country like India, where parents usually absorb the educational expenses of their children, affordable and customized credit options help them manage their finances without burning a hole in their pocket. BNPL is a hassle-free option with zero paperwork, an easy sign-up process and instant approvals.
The “Study Now Pay Later Model” Will Empower Millions For A Better Future
It has long been established that the “one-size-fits-all” approach of the traditional education system doesn’t prepare individuals to succeed in the ever-changing digital environment. With the rapid evolution of technology, back-end and front-end processes are changing. Working professionals are thus investing in upskilling themselves to thrive in this new-age business landscape.
Modern Edtech tools have leveraged technologies to offer students personalised learning on their mobile devices. Various content formats such as videos, audio files, AI-based immersive experiences, standardised and formative assessments, etc., are being used to help students learn at their own pace.
A KPMG report reaffirms this, stating that re-skilling and online certification courses are a significant part of the online education wave in India, accounting for 38% of the market. A major driver of this popularity has been the low cost of these courses, compared to traditional college courses. Around 48% of students are paying through instalments for such courses, which further increases adoption levels.
Flexible loan repayment solutions such as BNPL are a great option for millennials and Gen Zers, who demand credit access but are card-averse. In fact, credit card penetration in India is at a mere 3%, which means most people don’t have formal credit histories. FinTech platforms are trying to change the landscape by relying on disparate sets of non-traditional data, like bill payment histories and bank transaction records to establish the creditworthiness of borrowers.
COVID-19 has been a catalyst for the growth of the e-commerce industry, which in turn has led to a surge in BNPL platforms. This trend is expected to positively impact the education sector as well, which is also reeling under the drastic changes brought about by the pandemic. By providing people access to quality and affordable education, BNPL will not only foster success for the youth of the nation, but also work towards economic development.