With the start of online festive season sales, demand for credit products on the e-commerce sites also took off. Mayank Jain, director of consumer credit and business lending at Amazon Pay, speaks to Ayanti Bera about its Great Indian Festive sale, how credit demand is rising beyond tier-I cities and plans to introduce personal loans on the platform. Excerpts:
How has been the demand for loans this festive season?
I think this has been a record festive year — the biggest first 48 hours for Amazon. We had 95 million customer visits and we enabled credit services for nearly 60 million of them. One out of three purchases happened on credit, either through Amazon Pay Later or our co-branded credit card or consumer durable loans. In the first two days on Pay Later, we gave over 2 million loans. Usage of our co-branded card and our Pay Later service has grown about 10x. Moreover, three out of four customers who were purchasing on installments had a low-cost EMI offer available to them. We also saw the highest number of sign-ups for our UPI product this festive season.
Any noticeable demographic trends among festive shoppers?
We are seeing two-thirds of the festive demand for the credit products come from tier 2 cities. For both our co-branded credit cards and Pay Later product, we saw five times more sign-ups than a business as usual day. Even on the seller’s side, we have seen that most sellers take loans during this time. Again, two-thirds of those loans were given to sellers who are from tier 2, tier 3 towns and beyond. Amazon delivers to 99.99% of the pincodes and we see a full mix of those pin codes when the orders in.
Amazon Pay entered the BNPL (buy now pay later) market much later than most players. How has been the adoption and usage trends?
On Pay Later, this year we had worked very hard on expanding the credit line size and we offered this to more than 5.5 million customers. We have seen, normally, 90% of transactions on pay later are for pay next month. This is a unique thing Amazon has pioneered. Earlier, buy now pay later used to be like buy now and pay in 15 days or in 7 days. Also, 50% of the total value of the purchases made during the festive sale has been for buy now and pay over installments.
Credit card adoption in India has historically been low. How has been the adoption for Amazon’s co-branded card?
I think it is pretty popular among credit card users. Though we are still 4.5 million customers and there are a lot more credit card customers that we want to take this product to. But with these 4.5 million customers, we see a very healthy usage. Typically less than half of the credit card holders will be active every month. On our co-branded card three out of four customers are active and the usage is not just on Amazon. We see that three out of four transactions by these customers are done off Amazon. So this is like a top of the wallet card for these customers. We are seeing spends per card are much higher than the industry average as also the share of tap and pay transactions on our card.
Amazon recently extended Pay Later services to its Amazon Business customers. How has been the initial pickup?
The pickup has been really awesome. We now have big plans for next year to scale this offering. We have multiple lending partners with various banks and we are always looking to expand these partnerships. We currently offer it to sellers who sell on Amazon and the businesses who buy on Amazon. We are also thinking of extending this offering in the future to merchants who accept Amazon Pay QR Payments.
What are your expectations from credit availability on UPI?
We are all very thrilled about it. There is pre-sanctioned credit available on your UPI-linked savings account which is used by many more millions of customers than credit cards. Earlier customers could not use credit products in shops which did not have a POS machine, especially merchants in tier 2, tier 3 towns. But now credit on UPI brings the promise of availability of credit and usability of credit to any shop which has a QR code. So this is going to multiply the usability of credit and when the usability multiplies the demand also multiplies.
What’s in the pipeline for Amazon Pay?
Our aim is to integrate our customers with everybody, whoever is offering credit. We will be launching personal loans very soon, which will also help customers get money for other things that they probably cannot use Amazon Pay for, let’s say a hospital bill or a vacation or fees. However, it will be at least 2-3 months from now. We also recently started offering an Amazon Pay Later kind of line for customers on Amazon Business.
Ayanti Bera
https://www.financialexpress.com/business/industry-its-been-a-record-festive-year-for-amazon-in-india-3286505/
Comments