Type to search

Featured Stories Mime Stories Startup News Startups

Paylater Is Increasingly Interested by Consumers for Online Shopping

Share
Paylater Is Increasingly Interested by Consumers for Online Shopping

The rapid development of e-commerce has brought significant growth to the digital payment ecosystem in Indonesia. Because the platform presented can play a significant role in facilitating transactions with various digital payment methods.

Paylater Is Increasingly Interested by Consumers for Online Shopping

After the era of digital wallets, now consumers are increasingly interested in using paylaters when transacting on e-commerce platforms.

Based on Kredivo’s latest report entitled “Indonesian E-commerce Consumer Behavior” as of June 2022, paylater (17%) is the most frequently used digital payment method after e-wallet (53%) and bank transfer/virtual account (20%).

The report also notes that paylater users on e-commerce platforms will increase to 38% in 2022 compared to 28% last year. This survey was conducted in March 2022 on 3500 respondents throughout Indonesia.

In their findings, respondents used a paylater for a number of reasons, mainly to buy sudden/urgent needs (58%), shopping with short-term installments or less than one year (52%), and getting more attractive promos (45%).

Even so, some respondents are not interested in using a paylater because the main reasons are not wanting to add to their debt (43%), afraid of being wasteful (35%), and afraid of being fined if they are late in paying bills (30%).

“Some consumers have concerns about managing their finances. Here paylater providers have a role to make marketing strategies that can encourage awareness of using paylaters wisely. That way, they can manage their expenses,” the report said.

Paylater Is Increasingly Interested by Consumers for Online Shopping

Paylater Consumer Behavior

Judging from usage behavior, as many as 70% of respondents mentioned payment flexibility as the main consideration in choosing a paylater, the installment tenor varies (53%), can be used on many e-commerce platforms (49%), and the loan limit given is large (35%).

Based on transaction category, 90% of respondents use paylater to shop online, 50% to buy internet data packages, and 49% for monthly bills. Meanwhile, nearly 60% of paylater users spend less than IDR 500 thousand per month when shopping online throughout 2022.

The average respondent spends less than IDR 250 thousand (29%), IDR 250 thousand-IDR 500 thousand (28%), IDR 500 thousand-IDR1 million (24%), and above IDR 1 million (19%) for transactions with paylaters.

According to the Global Payments Report published by FIS, a US-based fintech software company, paylater accounts for 2.9% of total global e-commerce transactions in 2021 and is projected to increase to 5.3% in 2025.

The data shows the great potential of paylaters as one of the digital payment methods of choice for consumers on a global scale. This is also reinforced by the IDC report on “How Southeast Asia Buys and Pays: Driving New Business Value for Merchants” which shows the use of paylaters in e-commerce transactions in 2020 reached $530 million.

Meanwhile, nearly 60% of paylater users spend less than IDR 500 thousand per month when shopping online throughout 2022.

The average respondent spends less than IDR 250 thousand (29%), IDR 250 thousand-IDR 500 thousand (28%), IDR 500 thousand-IDR1 million (24%), and above IDR 1 million (19%) for transactions with paylaters.

Paylater Is Increasingly Interested by Consumers for Online Shopping

Paylater Potential

According to the Global Payments Report published by FIS, a US-based fintech software company, paylater accounts for 2.9% of total global e-commerce transactions in 2021 and is projected to increase to 5.3% in 2025.

The data shows the great potential of paylaters as one of the digital payment methods of choice for consumers on a global scale. This is also reinforced by the IDC report on “How Southeast Asia Buys and Pays: Driving New Business Value for Merchants” which shows the use of paylaters in e-commerce transactions in 2020 reached $530 million.

This figure is equivalent to 58% of the total use of paylaters on e-commerce platforms in Southeast Asia which amounted to $910 million in 2020. IDC estimates the value of paylater use in e-commerce in the region to reach $8.84 billion in 2025 or soar 8.8 times compared to 2020.

Tags: