Maldives

Travel now pay later: As loans disappear: India’s ‘travel lover’ bank shines on ‘travel now, pay later’

Travel now pay later: As loans disappear: India’s ‘travel lover’ bank shines on ‘travel now, pay later’


Maldivian blues or the dunes of Rajasthan? Rakesh Mandavaya, who is keen on both, has no budget. That’s when he learned about the “travel now, pay later” options offered by banks and fintech companies. The rest, as they say, was his inability to stop gushing about his Maldives travel experiences.

The 37-year-old, who was on a memorable holiday, and it was also a foreign one, said his six-month interest-free loan of Rs 1.5 lakh was approved within a day.

“Since my trip was impromptu, I didn’t have enough time to plan it and I didn’t have enough money to finance it. Then a friend told me about a travel loan. The process was very easy,” said the Delhi-based of IT professionals told PTI.

“I think there’s always been a need for this type of loan. It works for everyone, especially salaried employees. It encourages people to travel to new places and make holiday memories,” he added.

The TNPL acronym has become popular for the “Travel Now pay later” trend, a variation of the “buy now pay later” (BNPL) segment where customers buy products without paying immediately .

Be it foreign or domestic destinations, leisure or adventure trips, TNPL options from leading travel agencies including SOTC, Thomas Cook India and MakeMy Trip (MMT) put India’s growing tribe of ‘travel lovers’ at their fingertips Keji was busy checking off their bucket list. This trend has accelerated in the wake of the pandemic.

“You walk into a leading electronics store and buy a refrigerator or a cell phone. You see 10 options to pay by EMI or pay for a later item. But you walk into a leading travel agency and you won’t find any available “This is something we fundamentally want to change,” says Akash Dahiya, founder of SanKash, a travel aggregator with a network of more than 6,000 merchants. ’ told PTI.

Like any other EMI scheme, TNPL travelers take out loans to book air tickets and hotel expenses and pay them back in installments over several months. Partner NBFCs and banks provide short-term credit to aspiring travelers through an underwriting platform that uses data science models to assess a customer’s creditworthiness.

Online travel aggregators (whose platforms have both travel merchants and fintech partners) or travel agencies that have links to banks, fintech companies or provide credit through their own fintech arm can provide loans.

Business is soaring as the world opens up after more than two years of Covid and thousands of “revenge travelers”.

SOTC, one of India’s leading tour operators, has seen a seven-fold surge in inquiries from customers opting to travel now and pay later, said Daniel D’Souza, President and Country Head, Vacations, SOTC Travel.

“From March to April to June this year, we received more than 1,000 applications and have processed more than 325 applications,” he said.

SanKash reported a similar boom.

It is currently processing about Rs 150 crore worth of loan applications per month – a sharp increase from Rs 1 crore pre-Covid to Rs 2 crore. Dahiya said the business grew strongly sequentially at “30%”.

Likewise, TripMoney, the fintech arm of travel aggregator MMT that powers BNPL’s offering, has seen “4x growth” in this segment.

“Today, travelers actively consider and choose BNPL payment methods to book flights, trains and hotels, and for all travel purposes including leisure and pilgrimage. We expect BNPL as a category to grow in the future because of the convenience and flexibility it offers A spokesman for Sex MMT said.

While MMT’s BNPL facility charges no additional fees for terms of up to three months, SOTC charges interest of around “one percent per month” to those who repay the loan after six months.

According to data provided by various travel aggregators, the average transaction size for international travel loans and domestic travel loans is Rs 150,000 and Rs 70,000 respectively.

Around 60% to 70% of travel loan demand comes from young working professionals choosing international travel destinations such as the Maldives and Mauritius, as well as Southeast Asian destinations such as Singapore, Thailand and Malaysia.

“Travel is a disproportionate commodity in the wake of COVID-19. Banks and NBFCs can no longer ignore it…this single category is big enough to expand it around an entire vertical Similar to other consumer durables like two- or three-wheelers,” Dahiya said, banking on the growing appetite of Indian tourists.



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