Paylater Grows Rapidly During the Pandemic, Along With the Development of E-Commerce and Digital Transactions

Along with the development of technology, there are other aspects that continue to grow and develop, namely the growth of e-commerce and also the rise of financial technology (fintech) companies, an industry that is engaged in financial services. These two aspects shift people's habits in payment preferences, where cash payments switch to digital payments or what is commonly called cashless, which is the effect of increasing internet penetration and digital consumer adoption.

Digital payments also open up the transportation sector, food delivery services, online transportation, and online media to adopt digital transaction systems. In fact, these sectors predictable by the e-Conomy SEA 2021 report can contribute a figure of $70 billion in 2021.

Paylater shot to reach various circles

As digital transactions increase, fintech companies have new opportunities to spread their wings in presenting paylater facilities. It is implied from special report on paylater ecosystem in Indonesia a DSInnovate release stated that paylater became the second favorite service in 2020 (72,5%) or slightly below the digital wallet platform which had a recognition of 82,2%.

On the other hand, e-commerce positive trend which is increasingly accelerated by the pandemic has also triggered the high adaptation of paylater products in the community. Not without reason, research released by ResearchAndMarkets at the end of 2020 yesterday stated that the predicted growth in Gross Merchandise Value (GMV) which will reach US$8,5 billion in 2028 is estimated to help boost paylater facilities by approximately 76,7% annually. .

Even with the latest research released by Kredivo and the Katadata Insight Center entitled "Consumer Behavior of E-Commerce Indonesia 2021", also shows an increase in paylater users, namely there are 55% new users who use the paylater feature Kredivo..

The high use of paylaters also has a positive impact on the supply side, where this feature is able to help merchants increase AoV (average order value), increase sales by offering credit without a credit card, and also increase sales conversions by reducing friction during the shopping process.

While the paylater itself has two classifications, namely: paylater owned by digital startups (e-commerce, OTA, ride-hailing services, and others) and the second is paylater services owned by fintech startups. In Indonesia, there are many fintech companies that provide paylater services, the implementation is not limited, paylaters made by fintech generally become "online" credit platforms that can be used anywhere, from e-commerce to retail outlets.

Paylater pioneer in Indonesia, Kredivo, will serve tens of millions of customers in Indonesia.

Among the many fintech companies in Indonesia that are engaged in the paylater sector, Kredivo increasingly becoming a leader in paylater services in Indonesia, especially after announce plans go public through the SPAC scheme. Therefore Kredivo will achieve an equity valuation of $2,5 billion and managed to be"unicorns" in 2021.

According to Umang Rustagi as CEO Kredivo Indonesia, with its increasingly rapid economic growth in Indonesia, has made foreign investors and the global paylater market also increasingly eyeing.

"The popularity of e-commerce and digital transactions, as well as the low penetration of credit cards in Indonesia have caused paylaters to become more pintu people to access guaranteed credit. This can be seen through internal research which shows that 60% of our users get their first credit through Kredivo, "he said.

As a paylater pioneer in Indonesia, of course, paylater services owned by Kredivo has mushroomed on many e-commerce platforms such as Tokopedia, Bukalapak, Lazada, JD.id, Blibli, and Elevenia. In addition, the interest offered Kredivo to be Lowest (as of September 2021) compared to other paylater service providers.

Kredivo through PT FinAccel Finance Indonesia operates under a finance company license (multi) under the auspices of the Financial Services Authority (OJK), obtained through the acquisition of PT Swarna Niaga Finance.

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