Flipkart launches 'buy now, pay later' feature

In yet another effort to woo customers, homegrown e-commerce major Flipkart has rolled out a ‘buy now, pay later’ option using which one can buy products on its platform on credit.

The feature, currently in beta stage and available to select Android app users, is akin to a credit card. With a pre-defined credit limit, a customer can make purchases on Flipkart throughout the month without having to pay for the products immediately. The outstanding bill can be paid by the 10th of next month, according to information available on Flipkart’s Android app.

Users selected for the scheme will see a ‘Flipkart Pay Later’ option under the ‘My Account’ section of their app. The offer is applicable only to ‘Flipkart Assured’ products, and available on products of select sellers.

For payment, the e-tailer will send SMSes and app notifications to users on the 1st of every month, along with the bill details and payment link.

VCCircle couldn’t immediately ascertain the timing of the official rollout, and whether the offer will be extended to the desktop web site as well. It is also not clear on what parameters Flipkart has selected customers for the scheme, or how it arrived at the credit limit of users. For example, this correspondent was offered a Rs 5,000 credit limit.

VCCircle has sent a detailed e-mail questionnaire to Flipkart.

In the event of default, Flipkart will levy a penalty of Rs 100 for outstanding up to Rs 2,000, Rs 200 for outstanding of Rs 2,001-4,001 and Rs 400 for outstanding of Rs 4,001 and above, as per information available on the FAQ section of the option. Further default will lead to suspension of subsequent purchases from the account.

The Economic times had reported about Flipkart launching such a scheme and internal discussions in this regard in July last year.

In 2010, Flipkart became the first e-commerce company to introduce cash on delivery in India, which was subsequently adopted by its peers.

However, selling products to users on credit exposes Flipkart to the risk of wilful defaults. For example, a user whose account has been suspended on account of defaults could always create a new account. It remains to be seen how Flipkart plans to deal with such challenges.

India’s biggest e-commerce company by market share is leaving no stone unturned in its effort to outrun its US-based competitor Amazon, which is snapping at its heels.

Flipkart recently strengthened its war chest with a $1.4-billion fundraise from Microsoft, Tencent and eBay, and acquired the Indian operations of eBay Inc as part of the deal.

It is currently in talks with troubled e-tailer Snapdeal for what is being touted as the biggest merger in the Indian e-commerce space to date. The deal, which had run into an impasse, moved ahead last week after Snapdeal’s biggest investor SoftBank steered all stakeholders to a broad agreement.