Buy Now Pay
Later Services
in India: The
New Indian
Credit Trap
Department of Commerce
CHRIST (Deemed to be
University)
Submitted By:
Aditya Pratap Singh-
2311111
Akshaj DS-2311112
Introduction to BNPL
The Buy Now Pay Later (BNPL) model is a rapidly evolving trend in India's fintech
ecosystem, gaining immense popularity, especially among Gen Z. This research
examines its financial impact on spending habits and credit outcomes, a gap in
current literature.
The concept of deferred payments is not new to India, with traditional "udhari"
(credit) systems existing in local markets for centuries. However, the digitization
of this concept through technology-enabled platforms has created a scalable,
transparent, and efficient ecosystem that serves millions of consumers across
urban and rural areas. BNPL services have democratized access to credit by
leveraging alternative data sources, mobile technology, and innovative
underwriting models that bypass traditional credit scoring mechanisms.
Key Research Areas
Behavioural Drivers Regulatory Tightening
Present bias and payment triggers impulsive RBI's June 2022 circular on PPIs forced major BNPL
spending; 70% of Indian users admit to unplanned fintechs to pivot to co-branded credit cards.
BNPL purchases.
Default Indicators Generational Uptake
Multiple NBFCs report 3-5% spikes in Stage-3 BNPL Over half of Gen Z Indians prefer BNPL to credit
assets during 2024. cards for e-commerce checkouts.
Research Hypotheses
H1: BNPL has a positive impact referring materialism with adoption intention.
H2: BNPL has a positive impact on social usage with adoption intention.
H3: BNPL has a positive impact on customer support with adoption intention.
H4: BNPL has a positive impact on trust with adoption intention.
H5: BNPL has increased spending on BNPL usage.
H6: BNPL affects credit outcomes and scores on BNPL usage.
Aims of Our Research
• Assess how social influence, customer support, and trust impact BNPL adoption.
• Measure the effect of BNPL usage on consumer spending.
• Examine BNPL adoption's impact on credit outcomes (scores, risk levels).
• Explore variations across populations and regulatory environments.
Research Methodology
Data Collection Data Analysis
• Surveys: Representative • Quantitative: Regression
sample of Indian BNPL and correlation for
• users.
Interviews: Industry spending, savings, stress.
experts, fintech providers, • Qualitative: Thematic
regulatory authorities. analysis of interviews for
• Case Studies: Comparative regulatory gaps, consumer
analysis of BNPL • experiences.
Software: Power BI for data
frameworks in India, UK, cleaning, analysis, and
and Australia. visualization.
Expected Results
Increased Spending Debt Risk Regulatory Impact
BNPL adoption is predicted to Evidence of higher debt and Well-crafted regulatory
increase retail spending and financial stress, especially frameworks are anticipated to
create a quantifiable liquidity among younger, less financially lower default rates and boost
flypaper effect. savvy customers. confidence for long-term BNPL
sustainability.
Implementation Plan & Timeline
1 Foundation & Preparation Final survey, 2-3 interviews, review case studies/articles.
2 Intensive Data Collection Survey dataset, interview transcripts, case study notes.
3 Analysis Power BI graphs, finalize survey results,
keywords/sentences from interviews.
4 Reporting & Finalization Finalize research draft report, format report, finalize
data collection.
THANK YOU
