Bengaluru, July 20

As RBI put a stop on loading of credit line on prepaid payment instruments, fintech unicorn Slice has pivoted from credit lines to real-time term loans.

In a note to its customers, Slice founder and CEO Rajan Bajaj introduced this change as a feature update called Purchase power. He explained that the update is an estimated amount that a user may qualify to borrow from Slice. 

“It is backed by world-class risk and data technology infrastructure that enables real-time underwriting and provides you with the best possible credit we can offer at the time of transaction,” Bajaj wrote.

Further, he noted that  every time a user transacts with a Slice card, a new approval decision will be made to assess the best amount he/she can borrow for the purchase. This decision will be based on merchant credibility, risk, fraud checks, user’s past payments and repayment patterns.

Purchase power is different from fixed credit limits that Slice used to offer its customers earlier. In this model, the available amount for borrowing changes at every purchase. In addition to this, Slice has changed its tagline to ‘the simplest way to pay’ from the earlier ‘credit card challenger’. It also started showing customers’ loan agreements and sanction letters to users.

Post the RBI’s new guidelines, many buy now, pay later companies have either paused or changed their business model. Slice’s rival Pay-in-1/3rd card UNI is also considering a pivot to co-branded credit cards in partnership with banks, according to a source close to the company who spoke to BusinessLine on the condition of anonymity. This would mean a departure from being a pay-later card for UNI. PayU’s LazyPay is also reportedly considering pivoting to a credit card from being a Visa prepaid card.

Industry insiders say many BNPL companies misled customers by not explicitly disclosing the loans taken in the customer name, eventually attracting attention from the Reserve Bank of India. In addition to this, there have also been concerns around companies offering pay later products on minimum KYC as opposed to full KYC.

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