From travelling to buying groceries and gifts, to even health check-ups, the Buy Now Pay Later Market has been a huge success for many fintech companies. As per a report on "India Buy Now Pay Later Market Outlook to 2026" by Ken Research the Indian BNPL industry has witnessed a meteoric growth of 14x in just the last two years itself.
However in a major reversal, the RBI might have given a big blow to the BPNL sector through issuance of its recent guideline disallowing non-bank Prepaid Payment Instruments (PPI) issuers from loading Credit Lines that can hinder its growth. Essentially this means that Fintech firms or non-banking institutions can no longer load prepaid instruments such as digital wallets or stored-value cards, using credit lines, and the only valid options for a buyer are to prefill their wallet with cash, or to debit their bank or credit card accounts.
As of now, the BNPL industry is still struggling to understand the logic behind this new circular, as it threatens their very existence. In case a company cannot issue PPIs loaded with credit and lend, the entire business model will witness a breakdown coupled with the possibility of many BNPL players even getting forced to shut down due to regulatory pressure. Recently, LazyPay, payu lending arm stopped its BNPL payment product LazyPlus UPI after this guideline.
On the flip side, may others believe that this move is only a means to bridge the regulatory gap between Fintechs & banks, where the former enjoy greater freedom.
Notwithstanding, the comprehensive impact of this RBI Policy on BNPL players is something that we all have to wait for some time to see.
But, in your opinion how this new RBI rule will impact the Buy Now Pay Later Industry in India?
Let us know by commenting below.
For more information on the research report - India Buy Now Pay Later Market Outlook to 2026 refer to below link:
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