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Slice: Transforming Payments and Credit for India’s Youth

Bengaluru-based fintech startup Slice is revolutionizing payments and credit with its zero-fee Slice Super cards. These cards offer hassle-free daily payments and the flexibility to convert them into Equated Monthly Installments (EMIs) at no extra cost. They are becoming strong contenders in the credit card market and can be used for both online and offline transactions, including instant payments to e-wallets like PhonePe and Google Pay.

Slice also rewards users with up to 2% cashback on every transaction. With a valuation crossing the 1 billion mark in November 2021, Slice aims to reshape the financial experience for everyday people. The credit limits range from Rs. 2,000 to Rs. 10 lakhs, offering long interest-free instalment periods. Transparency and trust are at the core of Slice’s approach, leading to positive feedback and referrals.

Slice’s founder and CEO, Rajan Bajaj, is focused on providing powerful financial products to young Indians, helping them build their credit scores from the start. The integrated Slice app offers insights on spending patterns, repayment reminders, and suggestions for converting dues into monthly EMIs, promoting responsible credit habits.

Mission and vision

Slice targets college and university students, early-age business associates, freelancers, startups, and individuals who may not qualify for traditional credit cards. The company’s mission is to simplify financial products for young Indians, with an average customer age of 22.

Slice aims to provide credit options to students, enabling them to purchase essentials like books, laptops, and mobile phones, which can be repaid in monthly installments. The company’s vision is to create a transparent, modern, and user-friendly financial platform for the Indian youth community, making access to credit easier and more straightforward.

The business model

Slice’s business model primarily relies on several income sources. It includes subvention income from merchants like Amazon and Flipkart for no-cost EMIs, interchange income from card transactions, and interest income from EMIs. Slice cards provide users with real-time information on their daily payments, insights into spending patterns, regular expense notifications, and recommendations to convert dues into EMIs, making financial management more accessible.

However, following RBI’s regulations that non-bank prepaid instrument providers can no longer offer credit lines, Slice underwent a significant business model shift. As of July 20, 2022, Slice introduced classic term loans known as “Purchase Power.” Under this new mechanism, customers can borrow funds from Slice, with the borrowing amount reflecting their credit limit or the maximum amount predetermined by the lender.

This change means that Slice now operates more like traditional credit cards, assessing the creditworthiness of borrowers for each transaction instead of offering flexible credit lines as it did previously.

Challenges faced

In its early days, Slice encountered the common challenge of securing capital and assembling a skilled team, which many startups face. However, it uniquely faced difficulties convincing lenders to extend credit to young individuals, its target market.

Overcoming this hurdle, Slice then focused on developing robust risk management systems. To this day, the company grapples with the ongoing challenge of continually improving customer service to enhance the overall customer experience.

Other challenges Slice faces involve a low adoption rate and a higher likelihood of defaults in its lending operations.

Future plans

Slice has ambitious growth plans, with a target of acquiring approximately 150 million users for credit cards and Buy Now, Pay Later (BNPL) products over the next 5-7 years. Additionally, the unicorn fintech startup aims to expand its presence to over 24 cities by the end of 2022, with a primary focus on Tier 2 and Tier 3 cities.

In an unprecedented move, Slice, in collaboration with North East Small Finance Bank (NESFB), is set to merge following approval from the Reserve Bank of India (RBI). This marks the first-ever merger between a fintech startup and a small finance bank, as reported on October 4, 2023, by TechCrunch.

Read more: Profile of BharatPe: A Growing QR Code Payment App for Offline Businesses

Snigdha Basu
Snigdha Basu
A multifaceted writer, Snigdha Basu is a freelancer and a columnist at Entrepreneurs Today. She also spearheads Chic Life Edition - her own Digital Magazine with sustainable fashion, beauty, and culture at its core. Reach out to Snigdha at [email protected] for inquiries.
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