‘ePayLater’ Inculcates Deep Learning Algorithms To Carry Out Risk Assessment

Driven by the Mantra – Cashless Convenient Credit, ePayLater offers the simplest possible checkout
experience in existence today, providing customers with the ability to conclude a transaction with just a
click of the mouse or a tap of the touchscreen. It is a ‘Buy Now, Pay Later’ solution through which
customers can get access to an instant credit limit to make faster purchases, that too without having to
pay at the same time.

In a candid conversation with Express Computer’s Gairika Mitra, Akshat Saxena, Co-Founder, ePayLater discusses about ePayLater in detail, the latest technology used, and much more…

Just last year, Express Computer had covered you, where we talked about the IDFC Bank and ePayLater’s partnership. What has changed ever since?

ePayLater is India’s first UPI powered credit solution. We have come up with an innovative solution to empower individuals to transact on credit anytime anywhere. Our partnership with IDFC Bank got us unprecedented access to the UPI system, which means we now offer credit services on merchant portals which are UPI-enabled and BharatQR network. Since the partnership, our customers have taken up Scan and Pay in a big way and we see almost 10-15% growth month on month in terms of UPI transactions. Currently, ePayLater UPI can be used on Amazon, Flipkart, Myntra, Swiggy, Uber to name a few.

Moreover, we are now looking at business credit as a major thrust area, as there lies a huge unmet demand for easy credit. For our B2B segment, we provide short term credit to individual retailers for their business needs. This allows businesses to continue providing services to their customers and achieve higher sales through faster inventory churns. Currently, ePayLater has partnered with leading retailers such as Metro Cash and Carry, Future Retail to name a few and is continuously increasing its footprint across the FMCG sector. 

As per a recent report, the approximate value for the fintech sector in India was $33 billion in 2016, which is expected to reach $73 billion in 2020. How do you think is the fintech sector going to upsurge in the near future?

Fintech firms are breaking new ground in the formal finance sector through the innovative and dynamic use of technology in the lending process. Currently, the availability of credit at the point of sale is more or less absent for a vast majority in India, especially when the latter is digital e.g. e-Commerce portals. A number of people, despite being creditworthy haven’t had a way to instantaneously acquire a credit instrument at the point of sale itself and conveniently transact then and thereon. However, with a continuous ingress of a younger working population coupled with poor penetration of credit cards, the need for digital credit is on an unprecedented rise.  With a credit card penetration of less than 3% in a population of over 130 crores, we see a huge headroom for growth.

Another big game-changer would be UPI and QR based transactions. Both have really made payments seamless and is being adopted by customers across the country. As we speak many fintech companies and banks are laying down the infrastructure to facilitate UPI and QR based transactions because it is convenient and cost-effective for both the merchants and customers

In the coming years, consumers for Indian Fintechs are likely to be relatively new to the internet, largely from rural India, and with much less familiarity with technology and formal financial channels than the typical urban user of today. This is why we need further improvement in the digital infrastructure of the country. Fintech companies in India must evaluate how they can make their products and services useful and accessible for this new demographic, as this is where their growth and success in the long term reside.

What Is the exclusiveness of your startup, that’s unique from other gigantic players in the market?

The uniqueness lies in the concept; ePayLater is primarily an innovative digital method of using credit for making payments. We chose a path that was non-traditional yet congruent with trends – demographic and technology alike. We decided to build a purely digital credit offering, which would leverage the best of data science and engineering, and deliver an experience which is not just inclusive, but also superior.

While providing credit to customers ePayLater goes through a process of risk assessment to estimate the creditworthiness of a prospect. Traditional systems relied on historical data like credit history, bureau (e.g CIBIL)score and income to understand the risk associated. However, in a country like India where the credit penetration is almost negligible, much of the population has little or no credit history. Also, historical data is not always an accurate standard to predict future behavior.

Our algorithms allow us to approve many such individuals/businesses in real-time making our underwriting process inclusive and accessible for people at large. We aim to make credit more accessible and convenient for the growing population of India. In our case, we have built a product that serves the whole spectrum of customers. – urban, rural and even NTC (New to Credit).

What is the latest mode of technology that you are catering to?

ePayLater uses sophisticated deep learning algorithms for carrying out risk assessments to estimate the creditworthiness of a prospect. We leverage non-traditional data such as demographics, customer transaction behavior with the merchants, digital footprint, social media information and device information, as inputs to our model to do a real-time credit assessment of the customers. 

This real-time assessment by ePayLater ensures that a customer’s credit approval status is shared instantly. The approval rate is also higher than traditional banks due to the leveraging of alternate data along with traditional. This means a customer can totally avoid the hassle of standing in long bank queues for just getting his/her credit card approved.

How important do you think is it for people to rely on technology? Are there any major follies per se?

The world of finance has always been a particularly data-driven space. Determining the credit risk of an individual or a company requires access to substantial amounts of data, which was not always available in India’s cash-reliant economy.

Recently, we have seen government initiatives like Digital India and the adoption of smartphones and technology reliance by Indians.  New-age technologies like AI and machine learning ensures fast processing of a wide set of disparate data. Indian fintechs have adopted and leveraged technology faster than any other sector. In a country like India where the credit penetration is almost negligible, a convenient way of getting access to credit is what is needed to drive scale. With a continuous ingress of a younger working population, fintechs become pivotal in driving adoption.

A key challenge is the scarcity of data. The above technologies access to large amounts of quality data that it can analyze and make decisions. It takes a significant amount of time and effort to aggregate the data points that are useful for AI applications. Also, as customer behaviors evolve, machine learning models need to continuously learn and improve.

Coming to the financial perspective, are you a bootstrapped venture? If not, kindly elucidate on the nature and amount of funding raised

Recently, ePayLater closed the Pre-series A funding led by ICICI Bank and GMO Global Fintech Fund, an investment fund of the internet conglomerate in Japan along with family offices like Parekh and Patni and foreign investors from the UK. Previously, the company had raised USD 2 million during the angel round of funding. 

What are your immediate and long term milestones like?

We are working on a bunch of innovations that would help us further simplify the customer experience, besides making credit more inclusive. Alongside, having solved the first set of business challenges our merchant partners were facing, we are broadening the vistas and gearing up for other business metrics that could be achieved.

We are looking at business credit as a major thrust area, as there lies a huge unmet demand for easy credit. We believe solving the said problem would unlock the true business potential of micro-entrepreneurs across the country. Having experienced the green shoots of this welcome change already, we feel propelled to drive this with added focus and intensity.

Lastly, any word of advice for the wannapreneurs?

Every setback in life plays a major role in shaping the future. What matters most is not letting those setbacks hold you back and strive on consistently. Building ePayLater has been the most challenging yet fulfilling. To be able to create something tangible out of an idea is immensely satisfying. However, to realize an idea that affects the society at large is a reward in itself.