BackPayU to launch new businesses in bid to become payments hub
PayU will launch a product called LazyPay this month that will allow customers to buy things and pay a few days later
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Bengaluru: Payments processing firm PayU India plans to launch two new businesses—consumer credit and digital banking—and accelerate merchant acquisition as it aims to diversify and become an all-round payments hub, chief executive B. Amrish Rau said. The company plans to process $10 billion in transactions in the year ending March 2018, up from an estimated $5.5 billion this financial year.
In September, PayU, the digital payments provider owned by South Africa’s Naspers Group, bought rival Citrus Pay for $130 million in an all-cash deal. Rau, a co-founder of Citrus, became CEO of the merged entity, replacing former PayU India head Nitin Gupta, who left to start his own venture.
Since then, PayU has been working on providing credit to customers, initially for low-price purchases such as groceries and movie tickets. It will launch a product called LazyPay this month that will allow customers to buy things and pay a few days later. “Purchase and payment don’t need to be together. If we’ve seen customers transact over a few months, we know the likelihood of getting paid back. The crucial part with LazyPay is the speed of transaction. It allows people to pay at their convenience, much like how telephone companies allow post-paid. The next step will be to increase the credit limit," Rau said. Some time next year, PayU also plans to introduce a digital payments platform that will put the company in direct competition with the likes of Paytm, Freecharge and Mobikwik.
“The aim will be to move money faster for consumers. Once the consumer starts trusting us in this aspect, we can then offer various financial products and become a digital bank. We have to combine three or four things: P2P play, digital payments hub—all your daily payments can be made from the same app—and letting you move money faster. It’s not clear what exact shape this will take but we want to enable all banking and financial services-related transactions for customers through the platform," Rau said.
PayU already has a digital wallet though it’s insignificant compared with Paytm and others. Rau said, “We think of the wallet more as a place where your cards are stored digitally. It would give faster access to your cards or bank transaction. It’s something that will be there in the digital banking app."
As the new initiatives take shape, PayU is expanding its core business of providing payment gateway services. The company, which gets a majority of its revenue from consumer Internet firms, has introduced a product called Selfie that allows individuals and small businesses to sell products and accept payments across platforms such as Facebook and Twitter.
“Together as PayU and Citrus we’re covering 40-50% of the e-commerce market. Then, there are small businesses that are coming online that are underserved. Selfie is for merchants who don’t have their own sites and are using Selfie to promote and sell their products. For merchants who have their sites but aren’t Internet-savvy, we want to offer them a payments solution which they can integrate with their platform in 45 minutes," Rau said.
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