Credit Information Bureau of India (CIBIL), India’s first credit information company, and the Reserve Bank of India, the country’s central bank, are in talks to introduce a credit ratings system designed specifically to rate online shoppers. Currently, India is ranked third globally with approximately 228 million online shoppers and there is no method of profiling them. As the risk and credit history of these millions of shoppers is currently unknown, CIBIL has announced plans to launch a credit rating service to plug this gap.
CIBIL aims to launch and maintain a credit ratings system for e-commerce websites similar to the services it currently provides to banks, NBFCs and car dealers in India. Currently, leading e-commerce platforms like PayPal, PayTM and Citrus Pay are being considered as the first ones to be inculcated into the new system. When the system is actually launched, leading e-retailers such as Ebay, Flipkart and Amazon would have access to the credit profile of millions of online shoppers. Access to such data would enable these companies to launch targeted payment strategies suitable for individual customers.
The introduction of this online credit ratings system is expected to lead to new challenges for CIBIL with respect to inclusion of the current players as well as maintaining confidentiality of information for millions shoppers who would be profiled. However, the introduction of these services would definitely benefit current customers by reducing the number of checks necessary when granting credit limit enhancements and enabling seamless online transactions.