As the country gears up for the festive shopping season, affordability is expected to play a bigger role for customers in making high-value purchases. Gaurav Arora, vice president of payments and SuperCoins at Flipkart, said the e-commerce company expects around one-third of its mobiles and large electronics (MLE) gross merchandise value (GMV) to come via equated monthly instalment (EMI) options.
“Around one-third of MLE GMV comes through EMI options, with continued growth expected through the festive season,” Arora said, adding that nearly half of high-value electronics purchases are expected to be enabled through affordability constructs.
On Flipkart, customers have access to credit card EMI, debit card EMI and cardless EMI, supported by multiple banks and non-banking financial companies (NBFCs). Additionally, some of the other affordability options available include Flipkart EMI and SuperPay.
According to Arora, of all options, cardless EMI sees strong uptake among consumers in Tier-II cities and beyond. “A lot of our affordability propositions, especially cardless EMI, have a very high uptake among Tier-II-plus customers. Because these are the customers who don’t have the luxury of having a credit card. So, they really prefer taking some of these cardless EMI options that we are giving. It’s just access. We are democratising access to credit to just a much larger coverage there.”
The payment method customers choose also varies with the value of the purchase. Arora said that low-value transactions continue to see a strong preference for UPI, while the payment mix starts changing as the ticket size rises. He added that around the ₹5,000 mark, customers increasingly move towards credit cards, while affordability options like credit card EMI become more important for purchases in the ₹20,000-30,000 range and above.
Festive shopping also results in a sharp increase in transaction volumes. According to Arora, during the peak period, Flipkart sees payment requests to banks rise nearly 1,000 times compared with a normal day. “During the peak festive season, we handle 1,000x more payment requests than the BAU period.”
The surge, driven by consumers making large purchases, also increases the importance of payment reliability, as banks, payment gateways and telecom operators face a sudden spike in traffic. To that effect, Flipkart has been pushing biometric authentication as one way to address some of these challenges. Around 30 per cent of Flipkart Axis Bank co-branded card transactions are now authenticated using biometrics, and across banks where biometric payments are enabled, around 23 per cent of transactions use biometric authentication.
“Biometric-authenticated transactions are seeing a 12-15 per cent higher success rate compared with OTP-based transactions,” Arora said.
The festive payment mix is also being influenced by the growth of gifting. Flipkart’s gifting category has grown more than 60 per cent year-on-year, led by business-to-business gifting, while individual gift-card demand is predominantly coming from non-metro, Tier-II and Tier-III markets.