Every month the Reserve Bank of India releases figures of Deployment of Gross Bank Credit by Major Sectors. While going through the recent release as on April 22, one striking feature was unmissable. While Gross Bank Credit registered 11% Year on Year Growth, consumer loans recorded a whopping 65% growth during the same period. And while the detailed official analysis is not available, it can be safely assumed that the current trend of Buy Now Pay Later (BNPL) is one of the primary drivers of the spurt in in consumer finance. According to a consultancy firm Redseer, the BNPL market is set for explosive growth in coming years both in terms of number of users and amount transacted. However, a word of caution – there are potential challenges in terms of stricter regulation around this largely unregulated market so far, by the regulators.   

The present BNPL market is mostly dominated by e-commerce. Consumers primarily use this option for online shopping, food delivery, bill payments, online travel, eHealth, edtech, and ride hailing. Now the Indian OTT platform MX Player has joined the bandwagon by offering the choice of allowing users to view ad-free premium content, for which the viewer-subscriber can pay later. This will now redefine the entertainment shopping, beyond the traditional approach of ‘pay first experience later’. This offering from MX Gold is reportedly first of its kind in the world.  

Thanks to the ease of access to high-speed internet and the affordability of smartphones, OTT platforms have been registering phenomenal growth. This trend will gain further traction with the introduction of 5G connectivity. Besides, OTT viewership have now moved beyond the urban metropolitan cities and many viewers on the leading OTT platforms now hail from Tier II and Tier III cities. Of late, the content rich scripts have broken all linguistic and regional barriers, and we have a wide spread of menu both from global and regional platters, beyond just Hindi or English servings.
 
If other OTT platforms also follow suit in this post-paid billing of entertainment with flexible repayment and possibly zero interest rate, the OTT viewers will have more financial flexibility in choosing the platform and viewing content. And more so, for the live-streaming content like say a sports event or a live entertainment programme. And this post-paid initiative will make OTT subscription penetrate mass market still deeper while adding the convenience factor.

Mishra is a policy analyst.