FROM buying groceries, gifts, travel to even health check-ups - buy now, pay later (BNPL) has been a runaway success for many fintech companies. Looking at this exponential growth, the Reserve Bank of India (RBI) in its Payments Vision 2025 document has said that it is exploring guidelines on payments involving BNPL services.
Apart from the existing payment modes like cards, UPI and net banking, this new channel, facilitated by a few payment aggregators, leverages the existing nodal account to route payments between BNPL customers and merchants.
The central bank said, "This novel method shall be examined, and issuance of appropriate guidelines on payments involving BNPL shall be explored." Apart from this, the RBI disallows non-bank prepaid payment instruments (PPI) issuers from loading credit lines. Also, recently the RBI proposed allowing linking of credit cards with UPI. Will these initiatives have any impact on BNPL players? "RBI's decision of linking credit cards to UPI will lead to massive growth in digital payments. The BNPL arrangement is widely popular amongst those who do not have a credit history or access to credit cards therefore linking of credit cards to UPI may not affect BNPL ecosystem," says Saurabh Puri, Chief Business Officer Credit Cards and Lending Products, Zaggle.
This story is from the July 04, 2022 edition of The New Indian Express.
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This story is from the July 04, 2022 edition of The New Indian Express.
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