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One of the most interesting trends to play out against the backdrop of the accelerated adoption of E-commerce platforms in India, is the rise of the Buy Now, Pay Later (BNPL) payment option. A market research report by , a new-age provider of custom research and analytic solutions, highlights the potential of BNPL in the payments ecosystem, especially for E-commerce where BNPL will constitute 14 per cent of transaction value by 2026, growing nearly 5x from 3 per cent in 2021.The India BNPL market could become the largest in size globally and is expected to grow 10x over the next five years to reach USD 35-40 billion by 2026 from a nascent stage of USD 3.5-4 billion in 2021. India's large youth demographic, rising consumer spending, growing preference for online channels and electronic payment methods, exponential E-commerce growth, transparency with costs and benefits, and frictionless payment experience are expected to contribute to the market growth over the forecast period. Further, the low penetration of credit cards at just 5 per cent is not enough to address consumer credit demand. India currently has around 22-25 million BNPL users which are estimated to reach 90-100 million by 2026.The preference for BNPL emerges strongly in the survey conducted by Benori with over 1,000 users. An overwhelming 90 per cent said that they are more likely to shop from stores, both offline and online that offer the BNPL option at check-out. Likewise, a majority, 75 per cent, confirm using BNPL when shopping on E-commerce websites and apps. The BNPL option is most commonly used to purchase electronic products (71 per cent), followed by fashion and lifestyle accessories (67 per cent) and commonplace, everyday shopping items (57 per cent). BNPL's preference is being driven by its low or no interest rates, followed by flexibility and convenience, and non-eligibility for credit cards.The number of BNPL users is closing the gap to the number of users using credit cards. Nearly half of the respondents claim to be using both BNPL and credit cards for payments, 45 per cent of the respondents said that they would prefer to make their payments through BNPL, even if they own a credit card.While the multiple benefits of BNPL are recognized by people of all age-groups, 60 per cent of those more inclined to adopt BNPL fall into the GenZ and millennial categories. This points to BNPL becoming a ubiquitous mode of payment in the future as it sees increased acceptance from the young, digitally savvy segment of the population.Further, BNPL as an alternative mode of payment is adding to the spending capacity of consumers and is also encouraging overspending. A staggering 90 per cent of the respondents said that they spent more money than they had intended because of BNPL, with 40 per cent revealing that using BNPL caused their monthly spending to increase by 30 per cent. In fact, this increase climbed as high as 50 per cent for 33 per cent of the respondents. This trend was prevalent across tier-2 and tier-3 cities as well. The survey also indicated that on average, women spent more money when using BNPL than males.Users surveyed also expressed a preference for a credit limit of over INR 50,000 and a repayment period of 30 days, exceeding by far what is currently being offered by most BNPL providers.Commenting on the findings, Ashish Gupta, the Co-founder and CEO of Benori, said, "While there has been a huge increase in online purchases amidst the pandemic, the inflation and reduced disposable incomes led to the emergence and boom of short-term financing solutions. Both these elements propelled the growth of BNPL services in the country. While BNPL currently represents only a small share of the E-commerce spending, there are signs that there is still plenty of room for BNPL companies to grow in this segment. Additionally, with easy access to a digitally driven credit facility, BNPL is also addressing the gaps in the consumer credit demand that credit cards are unable to meet. Our research findings validate this and emphasise the favourable factors bolstering the potential of BNPL services in India. With the ever-increasing E-commerce volume, the fintech ecosystem and other growth drivers coming together, the Indian BNPL market is poised for extraordinary growth by 2026, emerging as a win-win situation for all stakeholders in the BNPL space."Benori Knowledge is a global provider of custom research and analytics solutions across industries, including consumer & retail, technology, media & telecom, internet & E-commerce, professional services, financial services, healthcare, industrials and education & social. They offer solutions aimed at supporting their clients' strategic needs that are critical to accelerate their growth and value creation. Powered by technology, Benori delivers significant insights to solve challenging business questions and simplify decision-making for key stakeholders in their clients' business.Benori is committed to minimising the challenges faced due to high costs, poor access and low quality of knowledge processes, and transforming them to deliver best-in-class actionable insights. Headquartered in India, Benori serves clients across the world, and works for top consulting and investment firms, as well as a variety of organisations across industry segments such as Fortune 500 companies, SMEs, and high-growth startups.To know more, please visit: .This story is provided by NewsVoir.will not be responsible in any way for the content of this article. (ANI/NewsVoir)( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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