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No Credit Cards? No Worries! A New Era of Digital Lending has Arrived in Indian E-commerce

The concept of “buy now and pay later” has been in practice for quite some time, thanks to credit cards. But due to low market penetration in India, only a tiny fraction of the population has been able to gain various benefits of credit cards. This has been one big reason why e-commerce in India, despite being one of the fastest growing e-commerce markets, has not yet reached the levels as in the UK, US, and other developed nations.

To address the issue, a new crop of FinTech (Financial Technology) lending start-ups is mushrooming in India, targeting the consumer segment that does not have access to credit cards or not even a bank account. Leveraging the constantly rising internet penetration in India, these startups are enabling people to gain various benefits of having credit cards, without having it.

Let’s take a look, how these FinTech lending startups are transforming the e-commerce landscape in India.

Making EMI available to all online shoppers

‘EMIs available with credit cards only’ has been a big roadblock for customers who don’t have credit cards. Effectively addressing this issue, a popular FinTech start-up ZestMoney is turning heads in this field by offering real-time EMI conversion to consumers with no credit cards.

According to CEO Lizzie Chapman, “More than 70 million online shoppers in India currently don’t have credit cards. ZestMoney is trying to help these online shoppers convert their purchases into EMIs without any hassle.”

ZestMoney has already tied up with numerous online e-commerce stores where people can just select it from the payment options and convert their purchases into easy EMIs. This allows consumers to buy anything without worrying whether they have enough funds in their bank account.

Helping Online Stores Tap the Unexplored Market

While there are already numerous people in India who do not own a credit card because of low credit score, there is another bunch which is not even eligible for a credit score, let alone having a credit card. ‘College students’ is one such untapped segment, which is huge enough in India to drive sales for the e-commerce sector.

SlicePay is a FinTech lending start-up that is bringing this untapped segment to the e-commerce bandwagon. It provides students small-ticket loans to buy a smartphone, laptop, and other such needed items online. Currently, SlicePay process loans of up to INR 15,000.

Currently limited to students, SlicePay definitely has the potential to acquire other market segments too. In a recent interview, founder Rajan Bajaj also said, “We have started with an early adopter generation of college students who are most frequent shoppers and a good demographic to build this infrastructure on before we scale up with millennials, and then others.”

A Welcoming Change for Sellers

When the ease of different digital payment options came into the picture, e-commerce businesses observed a rapid rise in their sales number. Now, the same upsurge is just around the corner with lending based digital payments.

A key FinTech player driving this trend is Finomena. It creates multiple EMI plans for customers for the product they want to buy. Unlike ZestMoney, which is more of a payment mode, Finomena lets customers paste the product page URL (from a 3rd party store) on their website, and produces EMI plans in return.

These custom created installment plans enable more customers to buy things online, who previously couldn’t make the purchase due to either not having the credit card or not finding the right plan. With these financing options, customer’s purchasing power amplifies; which is a very welcoming change for sellers.


Micro-lending or micro-financing is not a new concept in India; although, so far it has not been used in the e-commerce arena. Startups like ZestMoney, SlicePay & Finomena are trying to bridge this gap and unwind the full potential of Indian e-commerce market in the process.

Data Analysts also believe that these FinTech lending start-ups have huge potential with at least 40-50% growth in the near future. In fact, some of these players are already thinking of reaching the next level with AI and big data to make their offerings more streamlined. And not just India, every other emerging market (such as China, Latin America, South East Asia, and others) is benefiting from such startups.

Written By

Ankush works as a digital marketing and ebusiness consultant at FATbit Technologies, one of India’s leading web design development & startups friendly ecommerce solution company. Ankush expertise lies in branding and formulating SEO, SMO and startup advice strategies for business of a number of industries. He has been active in internet marketing services for past 5 years.

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