COVID Creates Buying Binge On EMI Option

The COVID-19 pandemic has proved to be a great tutor. The pandemic and the resultant lockdowns imposed world over have impacted the consumer behaviour greatly and it has changed the spending habits of consumers significantly. The ‘Buy Now Pay Later’ (BNPL) trend, which has primarily been popular in the purchase of smartphones, has made inroads in newer categories with the equated monthly instalments (EMI) facility finding relevance in products such as musical instruments, mechanisation of kitchen to even use of hair treatment products in a ‘stay-at-home, work-from-home’ scenario. 

These insights have emerged during an assessment of BNPL transactions across different merchant categories. This was revealed in an analysis carried out by Mswipe, an end-to-end digital enabler of SMEs and a POS acquirer. Mswipe offers BNPL or checkout finance through its Brand EMI offerings to SMEs across mobiles, consumer durables, education, health, furniture, wellness and luxury segments.

“The insights reveal a fundamental shift in the behaviour of consumers both in terms of their lifestyle choices and their financing preferences. The growing EMI economy creates opportunities for small businesses that have not been using checkout finance as an incentive for their customers until now,” says Manish Patel, Founder and CEO, Mswipe. 

Metro cities like Mumbai, Bengaluru and Delhi have seen a growing use of BNPL for hair loss and thinning treatments, indicating continued anxiety levels owing to COVID-19. The average transaction size observed for hair thinning and hair loss treatment was Rs 43,000, indicating a receding hairline troubling people living in metros. 

Further, the western part of the country is using BNPL to buy musical instruments. Purchase of guitar and piano, with an average transaction size of Rs 40,000 has been noted in Pune and Mumbai in Maharashtra through the instant checkout finance option offered on Mswipe POS Terminals. 

The northern and eastern belt running across Punjab, Uttar Pradesh, West Bengal and Assam have seen growing dependence on BNPL for mechanisation of the kitchen with customers buying items like chimneys, cooktops, hobs, built-in ovens and cooking range. Mswipe saw an average ticket size of Rs 20,000 for these products purchased on BNPL. 

BNPL led purchase for these kitchen must-haves has been observed heavily in Ludhiana, Chandigarh, Jalandhar, Lucknow, Varanasi, Gurgaon, Faridabad, Delhi, Noida, Guwahati and Kolkata. The mechanisation of kitchen in a work-from-home economy was also seen in Chennai and Coimbatore as well as in Ahmedabad, Surat and Vadodara.

With people getting used to video conferencing while working from home, office goers in like Chennai, Coimbatore, Erode, Trivandrum, Ernakulam, Angamaly, Calicut and Kannur are using BNPL for purchasing formal and casual shirts and dhotis. 

Mswipe had launched Brand EMI late last year as a value-added service which enables merchants to offer zero-interest EMI financing from over 30 brands in less than 15 seconds. This drastically improves the checkout process, and reduces cart abandonment due to lack of suitable financing options, thereby helping small businesses drive sales.