Card machines emerge as new agents for loans

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MUMBAI: The card swipe machine is replacing the in-store finance executive. Not only are banks extending personal loans against card swipes, but customers in the smallest of towns are making purchases with zero-interest EMIs.
This is because vendors like mobile manufacturers are able to provide interest subvention on these swipe payments. According to Amrish Rau, CEO of Pine Labs, which provides a payments platform to merchants, of the Rs 12,900 crore spent on its card swipe machines in shops this October, around Rs 1,700 crore is against EMI payments.
The company has partnered 30 banks and NBFCs that have already run an analytics application on their debit card base to determine the extent of credit to be made available to every cardholder. This makes it possible for Pine Labs to convert a large payment into EMIs using its Pine Pay Later application.

The platform enables vendors to subsidise the interest on the loan by identifying the product serial number without having any tie-up with the retailer. Until now, having a financing desk used to be the preserve of big box stores. The humble card swipe machine has levelled the field for the small merchants.
This year’s Navratri saw consumer durables sold against EMIs at points-of-sales (PoS) machines accounting for 79% more than last year’s Navratri, while laptops were 44% higher. Compared to pre-Covid (February 2020 levels), consumer durable sales in October are almost three times higher, while laptop sales on EMIs have increased of 129%.
“The highest growth that we saw during Navratri was in small regional retail stores and with independent dealers. Also, this is happening in non-metros,” said Rau. For instance, big organised retail chains saw a growth of 29% in EMI purchases, while it was 41% for small retail stores and independent dealers.
The states that recorded more than 50% growth were Gujarat (81%), Madhya Pradesh (56%) and Rajasthan & Kerala (50%). Among cities, Rajkot saw the highest growth (122%) followed by Vadodara (96%) and Surat (85%).“We are seeing immense interest from retailers to be part of the pay later platform. The highest growth is in the two-wheeler segment where EMI purchases are being made by swiping cards. Other new segments are furniture and wellness,” said Rau.



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