The global ecommerce payments industry is constantly evolving to adapt to the ever-changing needs of the customer. With the pandemic fueling digital commerce, flexible payment options have become an element of convenience in online shopping. What started with basic debit/credit card payments now includes internet banking, e-wallets, Buy Now Pay Later (BNPL), EMI, and more. Among these, BNPL is one of the most popular payment choices as it enhances the customers’ purchasing power.
BNPL Footprint in India
India is a budget-driven country, and BNPL is where financial inclusion meets budgeting. The country’s association with BNPL has been on an upward trajectory since 2021, owing to the rising adoption of ecommerce platforms among the country’s large youth demographic. Currently, India has around 20–25 million BNPL users, and it is likely to reach 100 million by 2026, given the magnitude of its demand and inclusivity.
Challenges for BNPL Issuers
In recent years, competition in the BNPL space has intensified, with incumbents going beyond their horizons to develop new, sustainable business models and traditional payments companies deploying their own models to stay relevant in the market. This not only unlocked the purchasing power and helped customers manage their finances by accessing affordable and low-cost credit, but also expanded the market for BNPL products.
On the other hand, the vying put significant pressure on the BNPL companies to scale quickly. The role of BNPL lenders does not stop with just issuing credit lines to consumers. They ought to partner with fitting merchants and large aggregators to offer appropriate payment plans, empowering smooth transactions and superior customer experience.
Let’s look at the challenges that every BNPL issuer must manage/address immediately.
- Onboarding of multiple merchants and aggregators
- Customizing solutions for each merchant based on ticket size and lending rules
- Managing end-to-end transactions such as billing, settlements, and refunds
- Understanding the payment flow to increase the success rate
- Handling schemes, promotions, and subventions
- Analyzing and managing risks
- Integrating multiple stakeholders to enable a number of checkout options
Partnering and working with a fintech that has a deep understanding of the market can help BNPL issuers set up the right mix of merchants and aggregators, which is the key to make BNPL work at checkout.
Keeping this in mind, we at M2P built a robust Merchant Acquiring & Payment Processing Platform. The platform is an exemplification of features that help improve checkout financing, boost merchant experience, promote sustainable growth, and amplify the acceptance rate of BNPL at checkout.
Merchant Acquiring & Payments Platform
Our Merchant Acquiring & Payments platform comes integrated with our BNPL stack that allows issuers to onboard merchants (online or offline) and payment aggregators instantly and integrate on checkout flow to go live in minutes. The platform is designed to scale with the best payment flows for higher customer acceptance and to support end-to-end checkout experience for all types of BNPL products like checkout EMIs and one-click payments. In addition, it offers complete transparency and control to the issuers in the merchant acquiring and payment processes. Thus, creating a win-win situation for all.
Here is a quick overview of what our platform can do.
- Frictionless and Instant Onboarding: The platform enables automated DIY onboarding with built-in validations and operations that comply with the maker-checker workflows to establish frictionless, real-time onboarding. It facilitates instant DIY and assists onboarding for all types of merchants (online or offline) and Payment Aggregators. This allows merchants across geographies to do business on a single platform.
- Supports all credit products: The platform supports all credit products on merchant checkout, like low-ticket convenience spends and EMI. This creates a robust interoperable shopping environment that renders flexible and smooth checkout experience, thereby augmenting customer loyalty, resulting in lesser cart abandonment, improved average order value (AOV) and transaction size, and increased sales. Such interoperability will significantly increase profits by creating new revenue channels for all parties involved.
- Easy developer integration: Developer friendly APIs, SDKs and plugins with a dedicated test environment to ensure merchants go live in minutes with minimal development effort.
- Feature packed merchant dashboard: The platform empowers merchants to manage transactions, refunds, settlements, reconciliations, disputes, and much more from one single dashboard. This substantially improves operational efficiency and supports easy reconciliation.
- Secure & Compliant: The platform is PCI DSS Level 1 Compliant and regular internal security audits are carried out to ensure that the systems are compliant, and data is safe. It has an in-built fraud and risk management module to protect your business and customers from fraudulent activities.
- Reduces cost and time: Traditionally, reports are manually generated, involving extensive manpower, time, effort, and money. Our platform’s automated billing, settlement reports, and reconciliation reports will reduce the operational cost and time consumed in monitoring and generating the reports. In addition, it also radically reduces the cost and a resource drain entailed in integrating payment methods into a merchant’s checkout.
What differentiates M2P‘s BNPL solution from others?
Our BNPL stack comes with an in-built Merchant Acquiring & Payment Processing system. It is a meld of seamless onboarding and merchant management system, integrated payments, refund processing, and risk governance. It facilitates multiple merchant or payment aggregator onboarding, merchant KYC, approval, and bank account addition workflow to assist in settlement and reconciliation.
In addition, it enables merchants to run campaigns, cashback and rewards integrations for each transaction, dispute management and refunds management, and merchant plug-ins. Our transaction risk management runs a dynamic MCC/MID check for each transaction, limit management per merchant, and velocity checks for transactions. It also provides a comprehensive fund settlement and report module to generate T+1 settlement with merchants and detailed MIS reports and analytics based on the user behavior.
In retrospect, with only 4% of the total population opting the pay later option, India‘s BNPL journey has a long way to go. Nevertheless, given the flexibility and inclusivity, the sector is steadily gaining ground in the country‘s financial ecosystem. It gives merchants of all sizes a chance to expand their customer bases to increase their average order values and sales.
Want to be a market leader in BNPL? Write to us at email@example.com
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