Can you briefly explain how the Buy Now Pay Later feature offered by Seizal works?
The Buy Now Pay Later (BNPL) option of Sezzle is very simple. At the time of purchase, a user has to pay only 25% of the bill amount. After two weeks, he pays another 25%, after four weeks another 25% and at the end of the sixth week the remaining 25%. This way the customer benefits from paying zero interest for any purchase in four installments in six weeks. unlike some other BNPL Players, we allow buyers to split each purchase rather than follow consolidated billing.
Credit cards also give customers free credit and easy payment options. How is BNPL different?
there are many differences between a Credit Card and BNPL. For one, we do not charge users an annual fee whereas most credit card companies charge an annual fee. Secondly, credit cards follow a consolidated billing system, in which users are billed for the entire amount spent during the billing cycle. If the card’s billing cycle is from November 1 to 30, then purchases made on November 29 also will be billed in December. In contrast, BNPL treats each purchase as unique and there is an option to pay in four installments for each purchase, giving the much needed flexibility to the users. Additionally, Seizal enables users to budget better as users pay for each purchase instead of depositing a lump sum amount and making payments in one go.
The general feeling is that if something is free, there must be a catch somewhere. If you are not charging any interest on the credit given to the buyer, where exactly do BNPL companies expect to earn?
Sezel believes in transparency and this is the reason why our merchant and user base has grown exponentially. When we say no catch, we mean it. A shopkeeper does not pay anything extra if the installments are paid on time. Sezzle earns commission from merchants every time they make a purchase using Sezzle.
How has BNPL grown in the last few quarters? Is global pandemic affected growth?
BNPL is one of the fastest growing and preferred payment methods. The total industry size in 2020 was approximately $6.9 billion. It is expected to reach $52.8 billion by 2028. This is an increase of 650% in less than a decade.
The pandemic helped bring BNPL into the mainstream, however, even at the present stage when we have passed the peak pandemic, the adoption of BNPL is increasing. Both traders and buyers are liking BNPL. What buyers love most about BNPL is the transparency and flexibility it offers. The use of BNPL is no longer limited to high value purchases such as electronics, buyers are increasingly using it for day to day needs including personal care, nutrition and food.
How does BNPL help in Financial Inclusion?
Obtaining credit was traditionally seen as a cumbersome and slow process. However, this is changing with BNPL becoming mainstream. BNPL enables buyers to profile demographics and democratize credit by bringing them accessible to everyone.
Do you think BNPL can help boost consumption during the festive season?
BNPL is empowering buyers and will continue to do so during the festive season as well. Around this time of year, shopping in all sectors such as clothing, jewellery, consumer electronics and durables increases. The buyer friendly model of BNPL will boost buying this festive season as well.
What is the growth projection for the coming year?
From being on the periphery to becoming a mainstream payment method, BNPL has come a long way. The development can be mainly attributed to transparency and ease of use. Technology is another factor that is enabling both shoppers and traders. For the remainder of this year and next year, BNPL’s growth trajectory will only be on an upward trajectory. You will soon have the BNPL payment option available at most of the offline stores as well. is i is now.
Your business model is built around an ecosystem of small businesses. Has it sold better?
Every merchant is important to Sezzle. We continue to empower businesses regardless of their scale. Since its launch in India in 2020, Seizal has tied up with over 800 merchants across categories. These traders have benefited from an increase in the average order value, an increase in the number of prepaid orders, and ultimately an increase in sales.