Amazon India will give zero-interest credit to customers to buy products on its platform or pay bills, partnering lenders Capital Float and Karur Vysya Bank for the initiative.
The company has followed in the footsteps of rival Walmart-owned Flipkart and a slew of smaller startups such as LazyPay, Simpl and ePayLater to launch a ‘buy-now-pay-later’ product of its own.
Vikas Bansal, Director – Financing and Lending at Amazon Pay India, said the launch comes at a time when consumers are extending their budgets due to the impact of the Covid-19 pandemic.
The service will allow consumers to purchase essentials on Amazon’s platform.
“The Pay Later offering gives you an instant credit line which you can use to either pay small payments and avoid any friction, or you can also extend your budget paying in instalments for larger ticket purchases,” Bansal said.
On average, customers on Amazon will be eligible for credit lines of up to Rs 15,000 which they will be able to pay after 45 days of availing the service. They will also have the option to convert their payments into equated monthly instalments with interest.
Amazon added that it extended credit lines of up to Rs 1 lakh during the pilot run for the service and will continue to offer as high as Rs 60,000 in credit to eligible customers.
Flipkart currently offers a credit line of up to Rs 5,000 through its pay later product.
With credit card reach at just about 3% of the population, e-commerce players are looking at credit as a way to improve affordability of large-ticket items such as phones, TVs, large appliances and furniture.
Both Flipkart and Amazon are investing heavily to get their 100 million plus customers to shop more frequently and make large purchases and looking at buy-now-pay-later as one of the main ways to do that.
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