Metrolife: Apps offer free credit for 15 days

Apps that let consumers buy now and pay later are becoming popular. Simpl, LazyPay and SlicePay are among the apps that allow purchases on credit. The apps borrow their informal credit philosophy from the neighbourhood grocer, according to Chaitra Chidanand, co-founder of Simpl. The credit limit starts low, at Rs 1,500, and no interest is charged.

Pratyakshya Subramanyam, who has been using Simpl for a month, says, “The app is helpful towards the end of the month when we have a cash crunch. The credit cap ensures we don’t splurge.” Simpl generates a bill at the end of 15 days. “We just pay the exact sum without any interest,” says Prayaksha.

Neill Albino Braganza, singer and songwriter, uses LazyPay to order food and buy movie tickets from BookMyShow. “As musicians, there are times when we don’t get paid on time. Apps like LazyPay and Simpl come in handy. The credit limit forces one to plan smartly,” he says. He started using LazyPay a month ago and Simpl three months ago but is careful to limit his usage.

Akshay Nagmule, the musician, uses credit apps three or four times a month. “I don’t have to wait to verify the OTP or give my card details. The fact that they don’t send any promotional messages makes them less annoying,” he says.

How is credit extended? The apps depend on a backend verification process that tells them how frequently the user has transacted with a particular merchant.
“The credit limit is based on customer behaviour. The more you use an app, the higher the credit limit,” says Chaitra.

How are the apps different from credit cards?
No banking process is required when the customer makes a purchase. The purchases are collated and the buyer can make one payment to the app at the end of the credit period, says Chaitra of Simpl.

“The concept is an inspiration from the Indian ‘khata’ system, where the key is loyalty and trust. We have about 140 merchants, including online platforms like BookMyShow, Faasos, FreshMenu, Big Basket and Nykaa," says Chaitra Chidanand co-founder, Simpl.