Bite Now Bill Later — How Digital ‘Udhaar’ Has Entered Our Lives

We all use mobile apps to order food and book tickets, but now you can pay for the services after using it.

You don’t find many people (read millennials) planning to buy a house or a car early in their careers, mostly because of their flashy lifestyle, which ends up emptying their pockets before they even get their next paycheck.

But you might find it hard to believe that startups, like Lazy Pay and EPaylater, have come up with apps that let you buy literally anything (even food), and you can pay for it, well, later.

Targeting a mobile-savvy generation is always challenging, but the buy now-pay later model might be a new trend in India, and experts have seen this space growing at a rapid pace.

So, are these platforms working their way into our lives simply because we can’t pay for our lavish Zomato/Swiggy meals everyday? To which Pallav Jain, Head of Consumer Business, PayU India highlights the convenience of using such methods.

It is not a question of having money for some people, they just want convenience, and with a platform like ours, they can buy/order stuff with a single-click process. 

Pallav Jain, Head of Consumer Business, PayU India

With over 2,50,000 users on its platform, LazyPay claims to clock 10,000-11,000 transactions per day, and till date, it is said to have clocked over 800K transactions. Over 70 percent of their users are on Android (rest on iOS), while 80 percent of their transactions are processed through mobile (20 percent on web).

Most consumers are aged between 21 to 35 years, residing in top 10 cities in the country.

Lazy Pay is a product extension of Pay U, mainly a payment gateway which has conceived this product, and they aren’t alone in this business. EPaylater made the headlines in 2017 for joining hands with IRCTC allowing railway tickets buyers to pay later for their travels.

Food ordering, bill payments, travel and movie ticket bookings are the avenues in the queue that are trying out this model. 

Meanwhile, established online shopping brands like Flipkart and Amazon are also not far away from doing something similar for big-ticket items. But what fascinated me about Lazy Pay and its model is their clarity on keeping it simple and small.

We all get food from Swiggy and Zomato by paying for orders every single time, which may not be to everyone’s liking. And in Lazy Pay’s case, they have identified 2,50,000 such people who’d rather accumulate their bill costs and pay in 15 days time.

We have a ticket size ranging between Rs 300 to Rs 400 for food delivery, which gets transacted 20 times in a month. But on an average, it comes about to Rs 700. 

Pallav Jain, Head of Consumer Business, PayU India

While there aren’t market reports to make a forecast for this model, but if the biggies have an interest in it, rest assured, the market will open up further.

India — Where Pay Later Never Works?

This whole pay later business takes you back to the old-school philosophy of ‘udhaar’ or credit, which isn’t new in our culture. But if there’s anything we have learnt about this model is that people never shy away from asking, but paying on time never works as it should.

Which is why, I was curious to know how Pallav and Co ensure that people who subscribe to his product, pay back for sure.

With help of machine learning and our deeply integrated algorithm, we only allow people who’ve got a good track record of making payments. We offer the service to some people, and filter out the people who fail to make the payment 

Pallav Jain, Head of Consumer Business, PayU India

All this technology in tow results in their model with a 98 percent of payment conversion rate, which according to Pallav, is under control with their access to data. But even then, defaulting users are given another three days to make the payment, which includes daily penalty of Rs 10.

But this impressive control on who gets to ‘pay later’ brings out the much debated ‘user privacy’ factor, which he says is monitored by machines, and with consent from the user.

We are not able to use all the data, we use only the parts which are essential for our model. Machine learning enables us to monitor the payment routine of customers

Summing up our conversation, he was quick to mention that Lazy Pay has prior agreement in terms of security with merchants when no transactions are taking place, safeguarding their business interest this way.

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