Flipkart has formally launched its credit borrowing solution for the customers. Called the Flipkart Cardless Credit, the payment facility will allow the buyers to make high-value purchases without having to worry about the lack of a credit card. The company, which was recently bought by US giant Walmart for $16 billion, will offer a credit of up to Rs 60,000 to the customers for a tenure between three months and 12 months.
The Flipkart Cardless Credit comes close on the heels of a similar solution launched by Amazon called Amazon Pay EMI. Flipkart said that the credit lending solution is an extension of the Pay Later service that was launched earlier this year. The credit of up to Rs 60,000 will be assigned to the customer within 60 seconds, claims Flipkart. However, the amount of credit will be made available on the basis of the customer’s behaviour on the e-commerce platform.
When checking out with a high-value product in the cart, the customer will have two options – Pay Later or EMI for 3 to 12 months. There are no interest charges mentioned by the company, however, there is some sort of interest levy likely against the credit amount availed by the customer. For Rs 2,000 or below, the customer can directly proceed with the checkout process, however, for the higher amounts, the OTP will be mandatorily required.
“Cardless Credit comes into existence as we understand that close to 45 million customers on Flipkart do not have access to credit, not that they are not entitled to. Amongst consumers, there could be gap in terms of purchasing power but the gap is not in ambition and quality that they want to own. The challenge is of affordability and that is what we are trying to solve. Cardless Credit will have potential customers including the emerging middle class mobile active borrowers who do not have access to credit cards or credit limits. We will leverage the understanding of these customers’ shopping behaviours and offer credit underwriting in a simple and transparent way, to make their shopping experience affordable,” said Ravi Garikipati, Senior VP and head of Fintech Flipkart.