Kolkata: Indeed it is good news for online shopaholics who do not like to purchase goods from open markets yet wish to enjoy the offers and discounts.
Non-Banking Finance Companies (NBFCs) are soon to bring in interest-free installment plans for online shoppers. The option is likely to be introduced in the next six months and may begin with the purchase of White goods, TVs and Phones etc first.
The initiative will be lead by the non-banking corporation Bajaj Finance which is currently, developing a payment gateway to suit the transactions.
Devang Mody, Bajaj Finance's president for consumer business said, “We are in talks with all the leading ecommerce sites to start zero percent EMI schemes and currently finalizing the mechanism since it would involve a change in technology in the back-end and the way the transaction will be completed.”
As per a report published in Economic Times, other NBFCs are also evaluating similar opportunities.
Currently, the option is available only for buying from large brick-and mortar stores.
The current payment gateway on ecommerce websites like Snapdeal, Flipkart and Amazon are suited only for transactions through credit cards, debit cards or net banking. However, in order to provide the EMI scheme to the online purchasers, the lenders will have to tweak their payments systems while also ensuring that they comply with the central bank guidelines.
Manish Sharma, managing director at Panasonic India and president of the Consumer Electronics and Appliances Manufacturers Association, said NBFCs' interest free credit facility to ecommerce consumers would further stimulate growth in online shopping.
"The EMI model works extremely well with the Indian consumer and eliminating the interest rate on online transactions will further increase the base of internet savvy consumers," said Sharma.
Currently, the purchase of durable items like Smartphone, television and household appliances account for 30-35% through finance schemes. The introduction of the zero-interest option will make the current market grow from $2.9 billion to $100 billion till 2020.
Initially, the offer will be available to the existing 60 lakh customers of Bajaj Finance whose KYC (Know Your Data) details are already available with the company. In the first stage of the launch of the new option, these customers will enjoy the zero-percent EMI facility.
The financier would eventually offer it to all customers who complete transaction formalities such as handing over of post-dated cheques or direct bank debit mandate to the delivery person during the product delivery, Mody said.