ASSIGNMENT – WEALTHNET

by
Sridhar Srinivasan Chikkala
2020mb53065

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PAYMENTS PLAYERS- FINTECH

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Payment Gateways: Pinelabs is gaining strength in consumer lending due to its pivotal position as a payment
gateway for a wide reach of merchants. All leading NBFCs have or are partnering with Pinelabs for BNPL
offers to customers, to reduce dependency on physical POS network.

Consumer • 600K+ POS machines; 50K+ merchants Consumer • On the Razorpay Checkout form, customers can make payments
Lending • Offers EMIs in tie up with 120+ brands, 35+ lenders, and 200k Lending using the Pay Later service offered by various third-party
merchants for fees providers

• Pine Labs earns commissions of up to 0.5% of the transaction value

from the lender as origination fees in addition to payment-linked fee
from the merchant
Lending • ICICI Bank PayLater
• Credit underwriting is done by lenders
Partners • GetSimpl
• Second-largest offline EMI-based consumer financier outside of
Bajaj Fin with US$2 Bn of annual disbursals • Flexipay by HDFC Bank

Lending • 35+ lending partners: 20+ banks for debit card and credit card EMIs • LazyPay
Partners • NBFCs like Zestmoney, Mahindra Finance, Bajaj Finance, IDFC First • Capital Float (to be started)
etc.
Solutions for • Working capital loans, powered by Gromore Finance and SBM
Lending • Working Capital Loans to merchants basis payments data
Merchants Bank
Solutions to
Merchants
• First Indian company to enter unicorn club in 2020; raised funds Growth • Total funding $367 M, valuation of $7.5Bn
Growth Plans
from payments giant Mastercard in January 2020 Plans • Last funding $160 M, April 2021
• Mastercard, Paypal ventures, Mastercard are primary investors. • Key investors – Sequoia Capital, Ribbit Capital, Y combinatory, Tiger
• Acquired Kuala Lumpur based payment and discovery platform Fave Global, Jeff Huber, Kunal Shah
for $45M • 40-50% monthly growth post COVID due to increased digital
• Making progress in its offline-to-online strategy in India and the payments
direct-to-consumer play in South-East Asia • 8M merchants in 2021, target 10M in 2022

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BNPL/ SMALL DIGITAL LOANS PLAYERS– FINTECH

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Digital lending landscape is witnessing exemplary growth with rise in digitization initiatives

Growing Demand Internet and Smartphone Introduction of e- Government

Penetration KYC Initiatives
Increase in working population India expected to cross 800 With e-KYC, banks can verify In the last few years, a
coupled with growing disposable million smartphone users by the borrower’s adhaar considerable amount of
income is expected to drive 2022. Has 750 M+ internet credentials and verify their money has been allocated for
demand for banking and related users. As per Google-Ipsos identity and other details. This digital India initiatives.
financial services Consumer Sentiment Tracker has made the process smooth Further support of the
Wave 1, Jul 2020, 56% of users and hassle-free for both lenders government can ensure that
who did not use online banking and borrowers Digital lending gains more
are likely to shift online importance

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Leading Small Loan Apps: Apps equip customers with an upfront EMI limit/ credit limit. Partnered with
wide scale of merchant partners (on/offline) where customers can use their limit to make purchases on
EMIs or make transactions and pay later, or simply withdraw into a/c.

App Users 28 m+ 7 m+ 10 m+ 26 m+

Payment/ Credit Voucher based purchase finance Small ticket personal loans from Buy now pay later with revolving Digital loans and health services
Solution Offered ~10K INR 500-30K credit line (avg ticket size 11K) Dhani Credit Line up to 5 L
Flexible personal loan* limit up to Targeting students and low salaried 90-95% repeat usage via e-voucher • Credit limit used for spends via
5K customers Small loan Credit Limit up to 30K Dhani One Freedom Card which
Personal loan up to 200K Cross sell personal loans up to 200K is like any debit/credit card,
Co- branded CC with RBL convert expense to 3 EMIs at 0%
*In reality it is a fixed term loan, flexibility
• Virtual and Physical card to cover
is to take smaller ticket and shorter online and offline expenses
tenures
Personal loans up to 15 L
Use Case – Flipkart, Makemytrip, Amazon, NA 500+ online and 3000+ offline NA
Partner Brands for Myntra, Cleartrip partners
Travel, e-commerce, furniture,
E-voucher usage
mobiles and electronics, jewelry

Lending Partners AU Small Finance Bank, HSBC, Jalan Chemicals Si Creva Dhani Loans and Services is a Non
Fullerton, and IIFL. Raised raised over INR 6 Bn debt Deposit taking NBFC, Wholly owned
from over 25 debt investors, which subsidiary of Indiabulls Ventures
include leading banks such as Kotak
Bank, AU Bank, Jana Bank, large
NBFCs such as Northern Arc Capital,
MAS Financial, and many leading
wealth funds
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Leading BNPL Apps: Buy Now Pay Later in India is offered in variations of pay later service, credit limits for
purchases on EMIs and Credit limit which can be withdrawn in bank account. Top 10 Pay Later Services -

• 7M users, 49M transactions • 3.5 M active users

• Credit limit up to 20K • 11 M users, 85K+ online/ offline merchant • Pay after 15 days in full or 3/6/9/12 EMIs
• 0% if paid within 14 days, 3% per month in partners • 250+ partner merchants
case of delay • 3/6/9/12 month EMIs • Scan and Pay via Lazypay or select Lazypay at
• 10K+ merchants – grocery, food ordering, • Leading e-comm partners – amazon, flipkart, checkout. Accepted at major apps like
doctor online, medicines, furniture, OTT makemytrip etc Zomato, Swiggy, Bookmyshow, makemytrip,
platforms, travel, lifestyle, D2C shopping • Multiple Lending partners – Aditya Birla, Tata Dunzo etc, Grocery stores, tea stalls, petrol
brands Capital, DMI, Hero Fincorp, InCred, Muthoot pumps etc
etc • Owned by PayU. Lending Partner PayU
finance

• Pay Later credit limit up to 1L – 3 variants

Lite, Delite, Elite • Credit up to 30K for free
• Lending partner Clix, DMI, Aditya Birla • Bill generated 2 times a month, 15 days
• ~15 M users, bill to be paid by 7th of next interest free period, late fee 2%
month • One time activation fee of 99
• Available in over 550 cities, wide online • 108 M users with 45M KYC done
merchants network • First loss guarantee up to 7% of outstanding
• Lending partners – IDFC First, InCred,
Fullerton, India Credit Co., DMI, Faircent

Almost all BNPL apps promote their refer and earn feature to grow app installs
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SMALL TICKET LOAN’s ad-hoc requirement and transactional use, makes them different from personal loans which
is more involved decision and fulfills personal/professional goal

Fulfil an independent need state The Need is transactional in Fees and charges for small loans APP platform should be easy &
& are mutually exclusive from nature, but preference is towards are high across players, price intuitive, with positive reviews
large PL in user’s mind getting money in the account competition will offer suitable and proper digital ad targeting
• Needed more frequently for fulfilling • Need is small & transactional, market entry • Digital (digital ads, google search,
ad-hoc expenses in times of cash however, users prefer receiving the • Fees and charges are high across all play store search) is driving the
crunch amount in their accounts to have major small loan providers category followed by
• Larger loans are not a substitute as freedom of usage • Avoid subscription based model or recommendations.
the need is small, & users wish to • Few Evolved users consider apps that daily usage limitation (like Dhani) • Apart from loan amount & fast
pay minimum interest on minimum offer transaction based BNPL with • Offer one time fees and charges with disbursals, trust on lender &
amount needed discounts and benefits, rest need nominal interest rate, as users mostly intuitive app interface can
cash in bank calculate overpayment make/break deal

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Small loans are usually triggered at a time of cash crunch as salary is delayed/ payments not received and one of
the following needs arises which have to be paid for

EMERGENCY SITUATIONS ENJOY MICRO MOMENTS SHOPPING TRANSACTIONS/ EXPENSES

Medical Emergency Birthday/ Anniversary Shopping Recharges and Bills
Hospitalization of gamily member, Want to celebrate, party with
Don’t want to miss out on sale/ Mobile recharge, electricity/ other
Hospital Bills, medicines friends, purchase gifts – children/
discount events like amazon big bills
spouse/ Girl-friend
Accidents Festivals/ Weddings
billion Fuel
2/4 wheeler repair Ran out of cash/ CC not
Celebration, home CD Purchase
improvement, shopping, gifts To supplement budget for working
Death/ Funeral Wedding in family – cash gift to buying electronics, don’t want EMIs/ CC Bills
Funeral expenses, last rites newly weds/ new clothes long EMI plans Other loan EMI payments

Customer in state of trauma, Customers don’t want cash crunch to Don’t want to miss out of benefit of Pressure of coping up with daily
emotional distress, need money fast delay/ spoil their happy moments. discount and sale events expenses
Need to match status/ social Add to comfort/ match status with Matching expectations of family
Looking for – pressures peers
• Fastest disbursal – 20 mins is Looking for –
considered as a wow factor, can Looking for – Looking for – • Fastest disbursal - 20 mins is
wait up to 12hr mostly • Fastest disbursal – 20 mins to 24 • Fastest disbursal – 20 mins to 48 considered as a wow factor, can
• No commute, fully digital hrs hrs wait up to 24hr
• Minimal documentation • No commute, fully digital • Low interest and fees • Low interest and fees
• Easy to apply, easy to understand • Easy approvals • Quick loan closure in 2-3 EMIs • Flexibility in repayment – pay later
in 2-3 EMIs

RESPONSIBLES YOUNG AND CAREFREE RESPONSIBLES

SERIAL CREDIT TAKERS
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 KISHHT – perceived to be transparent, trusted. Product and process is liked except fees and charges
considered on higher side

BRAND ASSOCIATION USAGE PRODUCT FEEDBACK

Product – loan up to 30,000 INR, average

Kishht is perceived as transparent, trusted, among users INR 9000
Product is liked for the small expenses, users
t&c are documented, governed by RBI, less
had positive outlook to use in future
likelihood of fraud
Positive feedback on product, no major
Local and approachable in comparison to Expenses related to few thousands say 5-10
issues cited except fee and charges
DHANI (Dhani is like a branded store and INR like household expenses, emergency
Kishht/KB are like local vendors). Most got situations, shopping, etc.
to know about it either through search or
recommendation.

APPLICATION PROCESS FEES & CHARGES OVERALL CUSTOMER EXPERIENCE

Quick process (address is auto picked from Fixed fee, deducted from disbursed amount
ID card), intuitive, no major problems Overall seen in positive light except fees and
is disliked. Loan is small and further
faced. Loan disbursed in 10-15 mins charges considered higher and issue of fees
deduction makes its utilization difficult.
deduction from disbursal amount
Users prefer to pay more
Less documentation – Aadhar and PAN card
Considered high interest rate - 18-20%. But
Highest rating on app store in comparison rationalized by small amount and tenure
to others

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 Kreditbee - overall positive, trusted, product and process liked. However users wished for higher loan
amount availability

BRAND ASSOCIATION BRAND USAGE PRODUCT FEEDBACK

Product – loan starts from INR 1000 and it

Kreditbee is perceived as professional, For very small expenses like utility bills, increases with repeat usage
transparent, trustable (RBI approved), for petrol, etc.
small expenses like bills, petrol, etc.
Users generally start very small with loans Positive feedback on product, no major
Local and approachable in comparison to as low as INR 1000. Then limit increases issues cited
DHANI (Dhani is like a branded store and over time
Kishht/KB are like local vendors). Most got
to know about it either through search or Users wished for higher limit
recommendation.

APPLICATION PROCESS FEES & CHARGES OVERALL CUSTOMER EXPERIENCE

Quick process, intuitive, no major Perceived to be less expensive in Overall positive feedback, positive intent
problems faced. Loan disbursed in 10-15 comparison to other lenders cited to use in future.
mins
However, user wished for higher loan
Less documentation – Aadhar and PAN amount availability and low interest rate
card

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 DHANI – widely know owning to brand endorsements, preferred for discounts and offers on medicines,
food, etc. However, product utilization is seen in low light and trust is weak

BRAND ASSOCIATION USAGE PRODUCT FEEDBACK

Dhani is widely known owning to its strong Product – credit limit usually INR 10,000 but
Dhani is preferred for discounts & offers
advertisement by M.S. Dhoni (Del & Bang) users allowed to utilize only 10% at a time
Discount on medicines and bills liked but
and Ayushmann Khurrana (Del) constrain of 10% on loan limits the benefit. Users dislike the daily limit on usage,
purposely done to slow utilization of limit so
0% interest is stated as key trigger to Dhani provides one of the highest discount that the subscription fees keeps mounting -
download &try on medicines ~35 % (others offer 20-25%) plus the charges on every transaction make
it even worse
Dhani is preferred by Zomato and Swiggy
users as it gives lot of discount

APPLICATION PROCESS FEES & CHARGES OVERALL CUSTOMER EXPERIENCE

Perceived long (salary slip in addition to Not transparent - Though users are drawn • Trust is weak, not considered
Pan card, Aadhar card and address), by 0% interest but they soon realize that transparent
address is not auto populated from ID card. fees are high and interest is covered in the • Long waiting time on call centre
fees itself • Too many calls to sell loans
Otherwise process is intuitive and easy to • Complaint management is poor - Do not
understand Monthly subscription fee is a highly disliked respond on time to complaints sent via
emails
• Discounts on medicines are liked
ECS bounce charges and multiple ECS hits in
a month

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