Fintech RazorPay saw 611% growth in BNPL business last year

The company said it recorded a surge in its BNPL business, which it said grew by 611% during the 2021 calendar year and by 569% in 2020

Razorpay, one of India’s leading payment getaways, has released the 10th edition of its (COVID) Era of Rising Fintech, outlining the growth it witnessed during the past year.

Among the most staggering figures shared in the report, the company said it recorded a surge in its buy now, pay later (BNPL) business, which it said grew by 611% during the 2021 calendar year and by 569% in 2020.

BNPL arrangements are booming in India on the back of surging e-commerce activity and demand for easy loans.

And the trend is showing no signs of slowing down. Indian Internet-focused consulting firm RedSeer estimates that there were about 10-15 million BNPL users in the country in 2021. That figure is projected to rise to 80-100 million customers by 2026. During that timeframe, the firm estimates that India’s BNPL market will grow over ten-fold to reach $45-50 billion by 2026 from $3-3.5 billion in 2021.

The surge in BNPL activity is part of the broader digital shift observed in 2021, Razorpay said, noting that the year saw digital payments effectively become mainstream.

Between 2020 and 2021, online payments at Razorpay more than doubled, growing by 104%, the company said, and digital transactions became a popular choice in everyday households, as evidenced by the rise in transactions relating to telecom (+3,640%) and utility bills (+2,353%).

Looking closely at the different payment methods used by customers, Razorpay indicated that the United Payments Interface (UPI), India’s instant, real-time payment system, recorded the highest growth, rising 174% from 2020 and 2021. In 2021, UPI was Indians’ preferred mode of payment with a 63% market share, followed by cards (26%), and e-mandates (1.58%).

The report also notes rising digital adoption amongst small and medium-sized enterprises (SMEs), claiming to observe a 1,500%+ increase in wholesale e-commerce between 2020 and 2021.