RBI’s working group on digital lending (November, 2021) recommended that BNPL financing should be treated as balance sheet lending.

Fintech lenders are active in BNPL space. It is one of the fastest-growing modes of digital payments, and is considered to be an alternative to credit cards, especially for people in their twenties.

BNPL forms about 2 per cent of total gross merchandise value (GMV), and is likely to grow to 7 per cent of GMV by 2026. The current value of GMV (2021) is $3 billion. It is likely to grow to $35 billion by 2026.

If we want to make BNPL grow further, it is necessary to expand it from online to offline mode. Fintech lenders are now offering physical cards to stimulate BNPL in offline mode. It allows the digital credit line across more touch points. It is particularly suitable for young people with no credit history.

Pay U has launched LazyCard.

There are collaborations between fintechs and traditional banks and NBFCs to operate in this space. These loans may be dispensed on pre-paid instruments, wallets or bank accounts.