In September 2016, PayU India bought Mumbai-based start-up Citrus Pay for $130 million in what was then the largest acquisition in the fast-growing digital payments market. (In September 2016, PayU India bought Mumbai-based start-up Citrus Pay for $130 million in what was then the largest acquisition in the fast-growing digital payments market.)
In September 2016, PayU India bought Mumbai-based start-up Citrus Pay for $130 million in what was then the largest acquisition in the fast-growing digital payments market. (In September 2016, PayU India bought Mumbai-based start-up Citrus Pay for $130 million in what was then the largest acquisition in the fast-growing digital payments market.)

PayU India plans to invest in consumer lending segment: Shailaz Nag

PayU India is exploring Bharat QR & UPI in a big way by enabling it on merchant side as the company see a huge potential in both these platforms, says COO and co-founder Shailaz Nag

New Delhi: PayU India, the digital payments provider owned by South Africa’s Naspers Ltd, plans to invest in companies offering unique products in the consumer lending segment as a part of its expansion plans for the coming year, said Shailaz Nag, chief operating officer and co-founder of PayU India, in an interview.

In September 2016, PayU India bought Mumbai-based start-up CitrusPay for $130 million in what was then the largest acquisition in the fast-growing digital payments market. Edited excerpts:

It’s been a little more than a year since PayU acquired CitrusPay. How has the acquisition changed the business dynamics?

At the time of acquisition, PayU India was already the preferred payments partner for 80% of the e-commerce businesses in India and also had a strong portfolio in the education and bill payments segment. The acquisition helped us expand our merchant base to the aviation (airline) and telecom sectors. Companies such as IndiGo and SpiceJet were transacting with Citrus on their platforms and in the telecom sector, Tata Teleservices and Bharti Airtel. Combining the merchant base, product line-up and cultures of the two giants, PayU India has emerged as a full stack payment provider.

Post the acquisition, what were the key takeaways and learnings? What were the challenges during the transition?

Our immediate challenge was to deliver innovation. With a successful acquisition of digital payments giants, we were expected by our partners and customers to bring the best of both worlds together and innovate. We decided to prioritize to bring our employees and partners into the fold and then move towards product innovation. Our second challenge was to find the right positioning for some of our leadership members post the integration. The integration helped us expand our business lines, which eventually lead to scouting for right opportunities that would complement their skill sets. This helped us retain our vital resources and kept our employee motivation levels high.

Any new mergers on cards or fresh investments that we see coming?

PayU has spent about $265 million over the past five years in India. Our focus for the next year will be credit and consumer offerings. If we find the right company in credit business segment, which has the right product mindset, we will certainly be happy to bring in the capital, invest in their growth and take them to the next level.

What are the target growth areas for PayU in 2018?

Digital payments have always been the very core business of PayU India. Our growth areas primarily comprise of payments business, SMB (small and medium business) and credit space. We will continue to bolster growth of our business in payments and SMB segments. Besides that, we are bullish about credit space in consumer and merchant segment. Hence, we will continue to scout for opportunities to invest in consumer lending segment. We are already offering small ticket credit to our customers via LazyPay. We plan to subsequently increase the credit limit and offer microcredit and EMI (equated monthly instalment) options to the customers in partnership with Kreditech. PayU India will explore to deliver Kreditech’s unique AI (artificial intelligence) and machine-learning credit underwriting and loan management technology to its 300,000-strong network of merchants. Also, our long-term plan is to set up Digibank which will look at easing account opening for youth and provide banking services to those who are unbanked and have no access to credit.

As a processor of digital transactions; how has demonetization impacted these transactions?

Post demonetization, PayU witnessed a 100% spike in queries coming from government and educational institutes. However in a couple of months, post demonetization, the business returned to the same pace to what it was during the pre-demonetization period. But the push by the government for the cashless economy has increased the interest and awareness among businesses on the advantages of accepting digital payments. Earlier, it used to take at least six-seven meetings to onboard a merchant; now businesses are converting at a faster rate and cost of acquisition has gone down.

With Unified Payments Interface (UPI) and Bharat QR being promoted by the government, do we see any new payment feature being introduced on the PayU gateway?

We are exploring Bharat QR & UPI in a big way by enabling it on merchant side as we see a huge potential in both these platforms. Also, the interesting thing is that the world of payments is changing at an exciting pace. We believe that ‘faster payments’ is the future and in this journey there will be number of transformations and new payment technologies that will shift the course of payments in the coming years and make the experience far more seamless. This innovation will not stop at UPI or Bharat QR.

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