It has become easier to buy products online on EMI easily without the necessity for a credit card. The e-commerce marketplaces as well as payment companies operating in India are prepping a model. This model will analyse the credit scores of the person for loans in a single click. Also, it is in line with the products that are similar in China, U.S. and Europe.
Basically, the target group of this upcoming model is the age group of 22 to 28 years and those who are new to the banking system with little conventional credit footprint.
Amit Lakhotia, the Vice President of Payments at Paytm, the marketplace and payment platform backed by Alibaba revealed some details of the model. He stated that EMIs will be limited to the products with high pricing such as white goods. If a customer does not have any credit history, the person’s mobile phone bill payment to check the credit worthiness. The rating will be shared with the banks and the person will be intimated about the process.
The Chinese e-commerce marketplace Alibaba has been involved in issuing virtual credit cards to the Chinese customers by checking their transaction history. This is a new sector for the lenders that uses non-traditional details to find out the credit score of a person. This is useful for the lenders that have been working along with the online marketplaces with a similar credit score rating system.
These services were adopted by the Western regions such as Europe and U.S. early. However, the crack of the Bill Me Later service of PayPal Credit in the U.S. signed up the users without their knowledge. Hence, the companies involved are treading with this service cautiously in India so that the privacy and customer data are not compromised.
Jitendra Gupta, the Founder of Citrus Payment Solutions stated that the product will provide the legibility to the customer in just 15 seconds. The credit scores will be provided to the customers on their database with the analytics engine. He stated that they will tell the banks if the person is eligible or not for the loan as disclosing the credit score is unethical.