With India’s household spending projected to surge by INR 60 trillion by FY26, the demand for flexible and affordable payment options is skyrocketing. During the Great Indian Festival 2024, Amazon revealed that 1 in 4 purchases were made using EMIs—a clear indication of their growing popularity. EMIs empower customers to achieve their aspirations without the burden of upfront payments. But with multiple EMI options available, how can merchants decide which one is the perfect match for their business and their customers?
Understanding Bank EMI
Bank EMI is a flexible payment option facilitated by the customer’s bank, suitable for a wide range of purchases.
Key Features:
- Eligibility: Customers must have a credit or debit card from participating banks.
- Interest Rates: Typically range between 14-16%, covered by the customer.
- Flexibility: Tenure options from 3 to 24 months, ideal for larger purchases.
Why Bank EMIs work:
- Universality: Covers most product categories, giving customers the freedom to shop across segments.
- High Loan-to-Value Ratios: Financing up to 90-95% of the purchase value, especially for long-term loans post-COVID.
- Transparent Costs: Clear interest rates allow customers to plan their finances confidently.
Understanding Brand EMI
Brand EMI is an exclusive partnership between brands and financial partners, offering affordability at the point of sale.
- Key Features: Includes No-Cost or Low-Cost EMI and/or Cashbacks.
- Eligibility: Generally requires a credit card, with terms set by the brand.
- Transaction Value: Primarily for high-value products, though increasingly available for lower-priced items.
Why Brand EMIs work:
- Customer Delight: No interest charges for customers, enhancing their shopping experience.
- Exclusive Deals: Tailored cashbacks and discounts create urgency and exclusivity.
- Upselling Opportunities: Merchants can promote premium products with appealing financing options.
Bank EMI vs. Brand EMI: Key Comparisons
Which EMI option is Best for Your Customers?
For price-sensitive customers, Brand EMI offers the perfect solution with no additional costs and promotional benefits.
For flexibility seekers, Bank EMI provides extensive tenure options and wider applicability.
How Razorpay Enhances the EMI Experience
Merchants aiming to cater to diverse customer preferences need a solution that integrates both Bank and Brand EMI seamlessly. This is where EMI² by Razorpay comes in.
Key Features of EMI² by Razorpay:
- Partnerships with 18 credit card providers, 2 debit card providers, and 70+ leading brands.
- Real-time offer discovery via Catalog feature, empowering customers to choose the best financing option.
- Advanced algorithms ensure personalized recommendations, boosting conversion rates by up to 10%.
- Unique offering of EMI Plus.
What Makes EMI Plus Unique?
EMI Plus allows merchants to offer No Cost EMI on products without existing brand tie-ups, providing a competitive edge.
For Merchants:
- Easily sell unsold inventory
- Stand out with exclusive No Cost EMI options
- Boost footfall and transaction volumes
For Customers:
- Access hassle-free no-cost EMI for high-value products
- Transparent pricing with no hidden charges
Unlike competitors, EMI Plus offers:
- Higher wallet limits: Cover products up to INR 1,00,000 (vs. INR15,000 elsewhere)
- Longer tenure: No-cost EMI for up to 6 months
- Lower fees: Only 1% processing fee, much lower than competitors’ 6-7%
The Right EMI for Every Customer
Whether it’s the flexibility of Bank EMI or the exclusivity of Brand EMI, merchants can effectively meet customer needs and drive higher sales. By understanding each type, merchants can recommend the best option, boosting loyalty.
With EMI² by Razorpay unlock new growth opportunities while delivering unmatched customer satisfaction. From real-time offer discovery to zero-cost EMI for untapped SKUs, Razorpay makes affordability your sales driver.
Explore EMI² by Razorpay today and empower your customers to shop with ease.
