ZestMoney primarily generates revenue through two core mechanisms: charging interest on the equated monthly installment (EMI) plans it offers and levying processing fees. This model allows the fintech platform to facilitate easy credit access for consumers while establishing a sustainable income stream.
ZestMoney's business model is centered around consumer lending, specifically "Buy Now, Pay Later" (BNPL) services, where customers can purchase items and pay for them over time through EMIs. Their revenue streams are straightforward:
Key Revenue Streams
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Interest Rates on EMI Plans:
ZestMoney earns a significant portion of its revenue by charging interest on the EMI plans it provides to customers. When a customer opts to pay for a purchase in installments, ZestMoney provides the financing, and in return, the customer pays back the principal amount along with an agreed-upon interest rate over the chosen repayment period. This interest serves as the primary compensation for providing the credit facility and covers the cost of funds and the risk associated with lending. -
Processing Fees:
In addition to interest, ZestMoney also generates revenue by charging processing fees. These fees are typically levied at the time of loan or EMI plan origination. They cover the administrative costs associated with setting up the loan, verifying customer details, conducting credit assessments, and managing the repayment process. Processing fees contribute to the operational efficiency and profitability of the platform, helping to offset the initial overheads of loan disbursement.
This dual-revenue approach—combining ongoing interest payments with upfront processing fees—ensures that ZestMoney has diversified income sources derived directly from its core service of enabling flexible payment options for consumers.
