Cardless EMI is one of the most talked about features in modern banking. It has helped provide credit services to people who don’t have credit cards without the high-interest rates charged by credit card companies.
Several Fintech companies and even banks have come up with what’s known as ‘Buy Now Pay Later’ (BNPL) options that are set to service around 80-100 million customers by 2026, making the industry worth $45-$50 billion within the next two years. That’s a mindboggling rise in numbers, given that the industry is currently worth $3-$3.5 billion.
What is Cardless EMI?
Cardless EMI is an offer that lets you purchase goods and services from online and offline stores using a pre-approved credit line offered by either fintech companies, NBFCs, or banks.
These are often available at lower interest charges, with some purchases coming in at 0% interest rates, making them one of the most popular credit options in the market today.
Moreover, the loan tenure is also diverse depending on the loan service provider and can range from a few days or weeks to several months, depending on the value of the purchase.
Who Can Qualify for Cardless EMI?
The simple answer is almost anyone. You can qualify for the loan if you have a decent credit score, a stable income, and good payment history. Even students without a regular income can be eligible for an offer based on the service provider’s terms and conditions.
In short, a provider could be willing to offer credit if you are a customer looking to purchase something. Moreover, you can also qualify for a cardless EMI option on your debit card if your bank offers such a scheme.
Options to Avail Cardless EMI
There are many options available in the market, and the consumer is free to pick and choose the service provider depending on individual preferences. Let’s look at a few options!
- Apps: There has been a proliferation of BPNL apps in recent years. Given the fact that India has one of the world’s lowest credit card ownerships at only 5.55%, which leaves the more significant section of the population very little in terms of accessing credit except for taking out a loan. And given that most banks prefer servicing bigger loans over a longer tenure, there’s very little choice in accessing microcredit. Using these apps, customers can instantly purchase goods and services from the pre-approved credit line by scanning a QR code, NFC payment, or availing a voucher.
- Debit Card EMI: This is a relatively new feature launched by select banks. Existing customers with a long and good-standing relationship with the bank get the option to convert their purchases into EMIs. This often comes with lower interest rates, and the EMI is deducted from the customer’s bank account at set intervals. And since debit card penetration in India is much higher than credit card ownership, this gives more people access to credit without having to go through a credit check or file KYC applications.
- Digital Wallets and eCommerce Sites: Popular digital wallets, along with leading eCommerce sites, have their BPNL services where the customer can purchase and pay the amount the following month. However, customers must fill in a few KYC details and pass a credit check to become eligible. However, while the credit line offered by digital wallets like Paytm and Amazon Pay can be used anywhere, including any online or offline shops, Flipkart’s credit line is platform exclusive.
Benefits of Cardless EMI
- Lower interest charges
- Range of tenure options
- Instant credit availability
- Simple KYC process
- Works with all leading eCommerce sites and offline stores
Cardless EMI is extremely popular among consumers as many get access to credit for the first time in their lives. With so many benefits and a simplified process to access credit, it can’t get any better than this for the average Indian consumer!