4 min read.Updated: 25 Oct 2021, 09:54 AM ISTVivek Punj
Slice CEO Rajan Bajaj says the company expects more than 150 million Indians to start using credit cards or pay later products over the next 5-7 years
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Bengaluru-based fintech start-up Slice expects more than 150 million Indians to opt for credit cards or pay later products over the next 5-7 years. Rajan Bajaj, Chief Executive Officer and Founder of Slice, says that his company will aim to be the best consumer product choice for this emerging market.
Talking to Livemint, Bajaj shared insights on Slice's plans for future offerings, how his company handled Covid-19-led disruptions, and more. Read the full interview below:
Slice has kept its focus on millennials and youth so far. Are there plans to expand to capture a wider market? If yes, then how do you intend to do it?
At Slice, we are constantly upgrading and expanding our product offerings to give our members a superior customer experience. Currently, the credit card penetration in India is under 3%, with around 35 million unique customers. This low credit penetration is due to various factors such as accessibility and experience.
We launched Slice card in 2019, a pay later card minus the complexities of a traditional credit card with a strong focus on customer experience. Slice card comes with features like starting credit limits of ₹2,000 up to ₹10 lakh, 3 months flexible payment plan for free, up to 2 per cent instantly redeemable cashback on every transaction, fast on-boarding process, and an intuitive app experience. We project more than 150 million people will start using credit cards or pay later products over the next 5-7 years in India and we aim to remain one of the best consumer product choices for that market.
Many banks in India have historically viewed credit cards as a loan product rather than a high-frequency payment instrument. Those banks’ primary focus is to optimize the fees related to credit cards and, with the help of portfolio teams, to increase the loan book, leaving the customer experience in the corner. However, we view Slice card as a payments product to solve a consumer experience problem with a ‘customer-first approach’ in mind. Any slight friction in product experience can lead to a magnitude of market size reduction, which is happening in India today.
At the moment, Slice has more than 4 million registered members with an average age of 27 years. We aim to become the payments product of choice for India.
Slice super card is an interesting offering. What’s the next product we can expect to emerge from your stables?
We have some exciting projects in the pipeline, one of them is integrating UPI for our members.
Over the last few months, we have introduced new features to our card. We recently introduced ₹2000 credit limits on the Slice cards. At the lowest end, credit cards go up to ₹20,000. Both eligibility and the rewards system is based on the user’s credit history and credit limit, respectively. Due to which only “pre-defined premium customers" benefit from it, leaving the rest of the users with a poor customer experience.
At Slice, we are genuinely invested in finding an alternative to this. Slice super card is created to be the most rewarding card for all users, irrespective of their credit limit. Every Slice member gets up to 2 per cent instant cashback, unique offers on ‘spark’ - our offers platform that reimagines the way card offers and discounts should ideally work. We have a simple goal - to make offers a lot more beneficial, delightful and rewarding for our members.
While there is still scope for experimentation in the credit and payments space, our customer-first approach has given us a strong word of mouth. Our mission is to grab a Slice of every consumer business and elevate the experience to greatness. It’s the philosophy we follow for developing any new product.
The pandemic has changed the way people spend. What has been Slice's strategy to deal with this disruption?
The pandemic brought with it a drastic shift in the way consumers approach digital payments. Slice’s mission has always been to provide the best customer experience. We have taken a very different approach to credit risk underwriting since the company’s inception in 2016. We have actively invested in building a solid risk infrastructure by leveraging data science in the last two years. Robust risk management capabilities have helped us scale our business and truly become an inclusive product.
Where do you see the 'Buy Now, Pay Later' market heading in a few years' time? Do you have anything special in store for the BNPL segment?
I think BNPL as a service will not truly work in India for the next 1-2 years. Globally, merchants shell out higher commissions to BNPL providers, and because India is a high-interest country, that number should be around 4-5%. Right now, back home merchants aren’t comfortable paying higher than 1-1.5%, impacting BNPL providers considerably. Between 2016-18, Slice also had a similar offering; due to merchants’ resistance to bear the cost, we decided to pivot on a card offering that allows us to be accepted at more than 5.5 million merchants.
During the last 12 months, globally, consumers have been opting for Buy Now, Pay Later payment option in the lure of flexible payment plans. And that's only possible with a higher commission from merchants. We expect to be one of the largest BNPL providers in the next 2 years as merchants see a win-win in BNPL partnership with millions of Slice customers.
Given the ongoing trend of start-ups going public, will we see Slice heading to the stock exchanges in near future?
We don’t have any immediate plans of going public.
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