Will zero interest EMIs bring more consumers online?

Online shoppers will soon have one more excuse to avoid the crowd,as leading e-tailers like Flpikart, Amazon, Snapdeal are likely to offer zero interest EMIs on online purchases.
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Online shoppers will soon have one more excuse to avoid the crowd,as leading etailers like Flpikart, Amazon, Snapdeal are likely to offer zero interest EMIs on online purchases.
Non-bank finance companies(NBFC) are working on interest-free installment plans for online purchasers. The EMI option is likely to be offered in the next six months, said industry executives with knowledge of the matter.This option is now available only for buying from large brick-andmortar stores.Bajaj Finance is leading the initiative and is a developing a payment gateway to suit the transactions.
"We are in talks with all the leading ecommerce sites to start zeropercent EMI schemes and currently finalising the mechanism since it would involve a change in technology in the back-end and the way the transaction will be completed," said Devang Mody, Bajaj Finance's president for consumer business. Other NBFCs too are evaluating similar opportunities, industry executives told Et Retail.
However,for offering EMI schemes to e-purchases on marketplaces like Flipkart, Amazon and Snapdeal, these lenders have to tweak their payment systems while ensuring that they meet central bank guidelines.Existing payment gateways for online shopping are suited for transactions through credit cards, debit cards or net banking. Most ecommerce sites also offer cash-on-delivery services.
Manish Sharma, managing director at Panasonic India and president of the Consumer Electronics and Appliances Manufacturers Association, said NBFCs' interestfree 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.
As per estimates, purchase through finance schemes account for 30-35% of consumer durable sales - such as smartphones, televisions, household appliances - through brick-andmortar stores in India. The nation is one of the world's fastest-growing ecommerce markets and various estimates suggest the market could grow to as much as $100 billion by 2020 from $2.9 billion now.
To start with, EMI facility will be offered on the purchase of items such as white goods, televisions and mobile devices. Bajaj Finance's existing 60 lakh customers - whose details, such as 'know your customer' data, are already available with the company - will enjoy the zero-percent EMI facility in the first stage.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.
 
 
 
 
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