How often do you add items to your online shopping cart and abandon the transaction, for mutliple reasons -a delivery charge is applicable, you find a better price on another website or the payment process is one too many clicks. Startups like Simpl and ePaylater offer customers a one click checkout option so you can complete the purchase in one click and get time upto 14 days to make payment.
According to industry estimates, cart abandonment rate on e-commerce portals in India can be a high 60-70%, meaning 70 in every 100 customers who are intending to buy product, don't buy it. While this can be attributed to several reasons, failure at the payment gateway is a major issue. "Customers add multiple products to the cart and once they are ready to check out, too many clicks are involved for them to complete the transaction choosing the payment method, the bank, entering user id and password or credit debit card no, cvv, sometimes grid numbers. It frustrates the customer," said Roshan Sam, UX specialist at Simpl, a Mumbai-based startup.
Simpl has tied up with over 30 merchants including BookMyShow, Faaso's, FreshMenu, Box8 and Zipgo to offer this convenience to select users. "Regular users of a merchant can avail this option.Our merchants have seen payment failures drop to almost zero. With card net banking, the failure rate is closer to 20%. We've seen cart conversions increase by well over 75%. Users on an average transact 50% more frequently after moving to Simpl as a mode of payment," said Sam.
The amount that a user can avail Simpl's convenience for is subject to their credit assessment and the typical transaction level of the user."Our website clearly shows the user how much they can avail and what they can do to increase the limit. As you use the facility, we will give you more," said Sam.
Simpl has raised seed funding from Green Visor Capital and IA Capital. Mumbai-based ePaylater, founded by Aurko Bhattacharya, Uday Somayajula, Akshat Saxena, Shanmuhanathan Thiagaraja and Prasannaa Muralidharan is another player in this space.ePaylater has raised $2 million from multiple investors.
To identify the select users,ePaylater runs an assessment using alternate data including social media profile, purchase pattern. The startup has partnered with over 20 merchants like PVR, Crownit, Indiamart, IndustryBuying and vareorganic. "While we offer micro credit to the customer, we are a technology company at the core. With existing credit options, there is a tedious onboarding process driven by document analysis.Our credit assessment is data science and analytics," said Akshat Saxena, cofounder, ePaylater.
By giving the user the extra period of 14 days to make the payment, Akshat says the customer simply has to show up and make the purchase, without worrying about the payment. The biggest benefit merchants can see is greater engagement with the same customer. Faaso's for instance has seen a jump of 40-50% in terms of no of transactions from the same user after partnering with Simpl.
"Customer repeats are the biggest indicator. The average order value in some segments has gone up by 50%. The frequency of purchase has gone up by 2x," said Saxena. Both Simpl and ePaylater have tied up with NBFCs who work with them on the assessment engine and managing the cost of capital or interest that accrues on the micro credit.