Leveling the Playing Field: How Retail Checkout EMI Provider, Paytail is Empowering Small Merchants!

Despite the popularity of online retail, a majority of Indians still prefer shopping the traditional way from mom-and-pop stores, where they can physically see and test the product before purchase. A recent survey found that 45% of consumers browsed products online but preferred buying them from offline stores. However, these consumers also expect similar perks to those offered by online retail stores and prefer offline stores that offer digital and contactless payments and credit services such as Buy Now Pay Later.

Paytail is one such fintech that is making it possible for offline retailers to meet their new-age customers halfway and fulfill their growing needs. By enabling instant paperless 0% EMIs to customers and empowering millions of Indian merchants with instant digital finance, Paytail gives customers more reasons to shop from offline retail stores and never leave emptyhanded.

We sat down with Vikas Garg, Co-founder & CEO of Paytail, to learn more about the company’s growth story, plans and perspective on the industry.


What is the history of Paytail and what was the inspiration behind it?

India’s retail is dominated by small offline sellers, a segment that has seen rapid adoption of payment tech after advent of UPI. However, for checkout finance these stores still struggle to deliver an experience to the buyers as the existing process, led by banks and non-banks is tedious and paper based. Paytail was established to address the unmet needs of this segment as we saw this is as a blue ocean opportunity that fintechs can capture with unique offerings around checkout finance.

In comparison to other digital credit models such as BNPL model where the average order value is low and customer acquisition costs are high, offline stores checkout finance takes an edge as there is mass and volume, the average order values are greater than INR 21,000 and customer acquisition cost is low. We also saw offline stores checkout finance as a tool for small and medium merchants to compete with large retail and ecommerce chains. We wanted to democratise credit for even smaller merchants, instead of just large format stores. For instance, a local electronics store owner in a metro city like New Delhi saw his sales increase by 32% month on month once he began offering Paytail’s emi options to his customers at the checkout stage. For the first time he was able to offer something similar to what his gigantic counterparts do on a regular basis.

Founded in March 2021 by banking industry veterans Vikas Garg and Amit Chaturvedi, Paytail is solving for access to consumer credit and convenience in offline stores in underserved and un-penetrated markets. The objective is to never let a potential buyer leave without making the purchase from any of the partners stores. Since then Paytail has majorly spread across Tier 2 and 3 cities. We have EMI acceptability rails running across 85,000+ retailers across the country. All the stores have been onboarded through 45+ Institutional partnerships, which include some large Indian and Multinational brands.


How large is the market opportunity Paytail is chasing? Growth potential? What are your plans for future growth and expansion?

India is primed to be the largest digital EMI market in the world with a massive addressable population. According to market estimates, the digital EMI user base in India is expected to reach 100 million by FY26. Another report suggests the industry will see a quantum leap to $45 – $50 billion in gross merchandise value (GMV) by FY26 by growing 15x. Digital merchant payments are expected to shoot up by over eight times and cross $1 trillion by FY26 from the current $285 billion. Digital lending, too, is projected to touch $100 billion in the next four-five years from the existing $20 billion, research estimates indicate.

Also, In FY 22, as per CRIF HighMark’s How India Lends report, consumer durable loans worth $11 bn were disbursed. This has been one of the fastest growing segments in entire retail lending space, with annual growth rate of 30% by value, and over 40 million loans in a year. Credit cards for instance grew by 4.4% by value and 17.7% by volume.

Our annual GMV run rate currently is at 950 crores and the same has grown 7X in past 12 month.  With a strong product market fit, we plan to grow at the same pace for next 12 months also. We are working towards a goal of a digital borderless Bharat with a product that is built for the masses and isn’t constrained by boundaries. In the coming years, we plan to enable category-focused trade between over 150 million households from over 300,000 retailers across India. For consumers, our paperless credit service and ease of use make it a go-to option for all future purchases.

We are currently bringing gamification for a small merchant’s store with the tools required to convert potential buyers instantly. We also have plans to keep launching similar features for merchants and customers alike.

How is Paytail’s paperless EMI and No Cost EMI more convenient for customers than traditional loan or EMI options? What are the benefits of paperless EMI to customers and merchants alike?

As the name suggests, Paperless EMI allows customers to apply for and complete the process of obtaining a personal loan online without a physical touchpoint and zero to minimal human intervention are the attributes of a paperless EMI. The app-based money lending ecosystem utilizes a data-backed credit lending model comprising traditional and alternative user data to sanction loans in less than 30 seconds. 

Our solution makes it easy for retail brands to offer credit options such as digital equated monthly installments (EMIs) or discounts. By working with a range of lenders, we empower any brand to make credit available to customers at the point of sale. This is a major step forward in democratizing credit and making it accessible to smaller merchants.

The demand for credit options is growing, and we are leading the way by piloting instant loan products and expanding the scope of our digital EMI offerings. These credit products, which were once only available at electronics or white goods stores, are now being offered in a wide range of industries, including fashion retail, restaurants, auto dealers, and even small-town traders.

We are on a mission to weed out the inefficiencies in the existing checkout process and make the checkout experience in an offline store better or equal to online commerce. we are making credit more accessible to a wider range of consumers. Additionally, our DIY, paperless activation for merchants helps reach deeper into geographies and retail markets. Enables access to credit for those who have limited access due to low credit card penetration in India thus driving financial inclusion. Our offerings have the potential to increase demand for consumer durables and drive economic growth. We are offering merchants in Tier 2, 3 and Tier 4 cities to enter the digital credit ecosystem with a paperless and efficient process.


What are some technologies you’ve used to improve the performance and scalability of your financial application?

If you want to build a top quality credit product, technology is the way to go. We have been using microservices architecture from day one instead of building a monolith first and then rearchitect the entire system at a later stage. The system is built on distributed architecture with the right use of latest technologies like Elastic Search, Kafka, MongoDB etc. We are hosted on AWS cloud and use Kubernetes scaling to handle any amount of traffic seamlessly. A robust tech stack like ours paves the way to boost our application’s infrastructure, thus facilitating performance as well as scalability as we grow across India.

What are some emerging technologies that you think will have a significant impact on the fintech industry in the next 5-10 years?

There are several emerging technologies that are likely to have a significant impact on the fintech industry in India over the next 5-10 years. Artificial Intelligence (AI) and Machine Learning (ML) is already in use for use cases such as fraud detection, credit scoring, and customer service. We expect these technologies to become even more sophisticated, enabling more accurate and personalized financial advice and products. Open Banking is another key area that has the potential to foster innovation and competition in the financial sector increasing financial inclusion by enabling customers to access a wider range of financial products and services.  IoT has the potential to facilitate payments and enable new services, such as personalized insurance products that are based on real-time data collected from connected devices.


What is your approach to customer service? How do you ensure that your customers are satisfied and their needs are met?

If you look at our product offerings closely you will find that they are designed to help merchants enhance the customer experience at the checkout stage. Such a product offering requires a sound understanding of consumer needs and demands. All our teams and departments are geared towards a customer-centric culture to foster a positive customer experience. They are always looking for feedbacks and keep an ear open to issues that customers and merchants might be facing. Our support team is constantly inclined towards stretching a helping hand to any issue that a merchant or consumer faces. We also have agents on the field, who are constantly dedicated towards the same.

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