While Flipkart has traditionally been an e-commerce platform in the most typical sense, the company’s latest product also sees it become a line of credit for its customers. The Walmart-owned Indian e-commerce giant has introduced ‘Cardless Credit’ which will enable customers to get an instant line of credit of up to Rs 60,000 when shopping on the platform. The new offering has been introduced in the run-up to the Diwali festive season, where customers will look to shop for new products.
Flipkart says that it is introducing this product in order to fill a large gap in the Indian shopping space – easy access to credit. According to the company, only around 20 million people in India have credit cards, while the economy largely functions on direct payments using cash, cheques and debit cards. Many customers might be able to make certain purchases if they are given the benefit of small-scale credit, which the company hopes to fulfil with this new product.
It also touts ease of getting credit as a key feature, as compared to the long and often cumbersome process of getting a credit card from your bank. Furthermore, banks often reject credit card applications on grounds of poor credit-worthiness. Flipkart promises to offer some level of credit, based on scores derived from customer behaviour on the platform.
Up to Rs 60,000 per customer will be offered, with the option to repay either the entire amount at the end of the monthly cycle or through EMI (from 3-12 month payment periods). When the payment is due, customers can either use a debit card or net banking to make the payments. The system will serve to benefit many buyers that don’t have access to credit cards but do have a bank account and debit card.
The concept of credit in India has traditionally existed on the basis of trust, and can typically be seen in every neighbourhood in the country. Flipkart hopes to extend this form of short-term credit to its customers just as a neighbourhood store would give its trusted customers the opportunity to pay later, but in its own modern way.