One of the biggest names in BNPL is investing in India as it looks to grow beyond Australia’s maturing market.
Australia’s second-biggest player in the buy now, pay later (BNPL) niche has announced plans to invest in Indian counterpart ZestMoney.
“With deep partnerships with online and offline merchants and lending partners, ZestMoney is poised to accelerate growth as the market develops,” Zip chief executive Larry Diamond said.
Zip has said that they’ll be investing upfront $50 million to acquire a minority stake in ZestMoney.
As part of the deal, the company added that they have put terms in place to grow that stake over time.
The move follows earlier comments by Zip executives, telegraphing the company’s ambitions to expand into new and overseas markets.
Zip’s stake in ZestMoney promises to help Zip fast-track its efforts to target younger demographics in the region. Based in Bengaluru, the Indian start-up is said to have 11 million registered users.
ZestMoney’s co-founder Lizzie Chapman suggested that BNPL will leapfrog more traditional credit cards in the coming years.
“The shift towards Pay Later solutions is a global phenomenon and represents young digital consumers looking for transparency, honesty and no hidden charges in financial products,” she said.
In a statement announcing the move, Zip suggested that India has the potential to become one of the world’s largest BNPL markets as a result of consumer spending trends.
“While Buy Now, Pay Later is emerging as a preferred mode of payment globally, in India it also plays a crucial role in driving access to credit,” Mr Diamond said.
Although Zip rebranded their US business from QuadPay to Zip earlier this year, it is not yet known if ZestMoney will face a similar level of brand consolidation.
Zip’s latest investment in expanding their overseas footprint comes as the popularity of BNPL continues to grow, as does the level of competition in the space.
Recent months have seen tech giants like PayPal and Amazon enter the scene. Rumours continue to circulate that Apple will launch its own BNPL offering in the near future.
Meanwhile, in Australia, major players in the more traditional finance sector such as Suncorp and the Commonwealth Bank of Australia have sought to put their own spin on the formula.
Taking the popularity of buy now, pay later global isn’t the only item on Zip’s growth strategy. The company is also recently flirting with the possibility of adding cryptocurrency trading into the mix.
Earlier this year, Zip co-founder Peter Gray committed to bringing support for the trading of cryptocurrencies like bitcoin and ethereum to the Zip customers sometime in the next 12 months.
“We know our younger generation of customers seek additional products and services that are relevant to them,” Mr Gray said.
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