Why Fintechs Must Revisit Credit Ahead of Festive Rush

India’s festive season is set to start. In the past few years, the festive season has been dominated by conventional ecommerce players with special themes like Big Billion Days and Great Indian Festivals, pushing the sale of small to high ticket items. Even as conventional players have a hold, the ecosystem has also undergone massive changes. Think quick commerce. Think easier payment options like buy now, pay later, credit card or easier financing schemes. 

With rising incomes and a middle class base, the appetite for such festive sales is unlikely to diminish this year. The BNPL and checkout EMI volumes, which have now begun to play a key role in online shopping, is set to hit USD 30.5 billion in 2026. And then there’s Gen Z that’s entering the credit space with its own spin – according to a report, 69% of Gen Z card users borrow again within 12 months of first credit card. 

Interestingly, traditionally banks have struggled to penetrate the smaller cities and towns in terms of credit cards, and faced challenges like high customer costs and rigid underwriting. The online play, however, ensures a direct credit embedding via BNPLs, and others. 

Friction Upstream

Experts believe that scrambling to get consumers’ attention just at the payment getaway during high volume events like festival sales is not effective. 

According to Bhargav Errangi, Founder of POP, banking on just checkout-stage interventions creates unsustainable unit economics during such phases. He explains:

“Most EMI products today are checkout-stage decisions. We built POPchop to sit in the discovery phase and everyday shopping — where someone is already engaging with brands, earning and spending POPcoins, building a pattern we can actually see. So by the time credit is relevant, it’s not just a decision at checkout, it’s an extension of behavior we already understand. More than half of our early POPchop users are accessing credit for the first time, so transparency and discovery are not optional here — they’re the whole point on POPchop.”

One of the ways this can be fixed is bringing up credit availability into the discovery phases. This could enable fintechs to capture intent organically much in advance before the event begins and hits its peak. .

“POP is not trying to win someone at checkout, because we’re already present much earlier, in discovery — that’s a deliberate choice in how we’ve built POPchop into the journey. People are in the app earning and redeeming POPcoins, discovering brands, coming back for reasons that have nothing to do with a single purchase — 42% of users redeem coins within a 90-day window, and a similar number of POPShop customers return for a second purchase. That ongoing relationship is what makes repeat transactions organic instead of paid-media-dependent, and it’s exactly what we believe will keep our CAC sane when festive ad costs spike,” Errangi added.

Assets to Experience Credit

Even as festival sales have largely been about high-ticket items like TVs, gold and refrigerators, the playbook is gradually evolving and expanding. There’s a shift towards experience-focused spending such as wellness routines, home renovations or travel. This also paves the way for altering the underlying unit economics, prompting fintechs to come up with more flexible subvention models. 

Jitin Bhasin, Founder and CEO of SaveIN, explains this trend through his company’s evolution: “SaveIN started out by focusing on out-of-pocket elective healthcare and wellness, and we finetuned the product to suit merchant and customer needs while forging refined lending partnerships and developing proprietary underwriting models. This sharp, vertical-focused expansion allowed us to grow efficiently and gave us the space to develop deep domain expertise. Over a period of time, it became clear to us that our 3-in-1 lending stack — comprising crores of bank-approved customers, multiple NBFCs, and Credit Card EMIs — adds immense value in domains beyond healthcare as well.”

“We want to ensure that SaveIN becomes a household brand when it comes to on-demand, checkout finance, both online and at offline points of sale, and that requires us to service all high-value needs at a household level. So, expansion into other domains was a natural line extension for us,” Bhasin adds.

Bhasin notes that Indian consumers are now prioritizing quality-of-life purchases:

“While investing in and upgrading electronics and consumer appliances still accounts for the bulk of EMIs in India, we are seeing a significant portion of customers now prioritize experience, travel, lifestyle, and wellness, among other things, with the aim of simply improving their overall quality of life. This is a pronounced shift in consumer behaviour that we’re witnessing firsthand, and honestly, it’s a trend that’s only accelerating as we head into Q3 and Q4. It is very much in line with the broader evolution of our economy, where consumers are no longer just spending on assets, but increasingly on experiences that add real value to their lives.”

Margins

Having said that, experts add that scaling transaction volumes cannot come at the cost of unit economics. To address the low-margin categories, checkout platforms mostly have a dynamic fee structure that splits costs between stakeholders such as merchants and lenders. This, however, varies with tenure and ticket sizes. 

Bhasin elaborates SaveIN’s revenue model and low-CAC operating strategy: “SaveIN offers no-cost EMIs as well as low-cost EMIs to customers through a vast network of merchants across Healthcare, Furniture, Lifestyle, Travel, Education, and more. For no-cost EMIs, the cost is borne by the merchant in full through a Merchant Discount Rate (MDR) that is commensurate with the tenure for which no-cost EMIs are availed by their customers, and this varies as per 3-6-9-12 month payment structures. In the case of low-cost EMIs, where the merchant bears a certain subvention, the remainder is passed on to the customer through a mix of processing fee and interest, as applicable. Importantly, SaveIN offers subvention plans starting at just 3%, which makes us an extremely competitive pay-later option in the market, giving both merchants and customers flexibility depending on the category and transaction size involved.”

By anchoring its acquisition model directly at merchant points of sale (POS), SaveIN has nearly doubled its loan issuance in FY26 compared to FY25 while maintaining positive unit economics and near-zero marketing CAC.

“As far as LTV is concerned, we are actively working on unlocking greater customer value through the launch of various new products over the course of FY27, which we believe will further strengthen our economics across both high-frequency categories like travel and more one-off spends like elective healthcare,” Bhasin notes.

For POP, managing high volume during peak festive sales means scaling deliberately rather than buying inorganic checkout traffic:

“Our approach so far has been to grow POPchop deliberately rather than just switch it on — it’s been in limited rollout with zero external marketing support and it’s still generating 10 to 12% of POPShop orders organically. That tells us the demand holds up without us forcing volume into categories or partners where the margins don’t support it. We’d rather scale where the model works for the consumer, the merchant and our lending partners together, and expand from there. Festive season is when the model gets tested at scale and we would rather build on it than abandon it,” Errangi states.

New Frontier 

For SaveIN, the next growth phase includes pairing its extensive merchant network with strong direct-to-consumer brand recall, ensuring users actively ask for the platform at checkout:

“…while this will unlock incremental revenue for us, it is an area that requires real differentiation and ruthless execution — something we hold ourselves fully accountable to. Rather than viewing merchant POS integration and consumer brand recall as competing priorities, we see them as parallel tracks that need to move together. Our 7,000+ partner network gives us reach, but building the kind of brand recall where a customer actively asks for SaveIN at checkout is the next frontier for us, and that’s where a significant part of our energy and execution focus is headed in the near term,” Bhasin concludes.

To summarise, this festival season fintech platforms won’t be just focusing on easy credit but deeper integration and likely much earlier in the transaction journey, such as discovery. And this could very well be the staple feature for online shopping in the near future.