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Naspers-Backed PayU Receives Nod From RBI To Operate Its Own NBFC

Naspers-Backed PayU Receives Nod From RBI To Operate Its Own NBFC

PayU plans to bolster its effort in laying the foundation for its credit business

With NBFC license PayU will launch new products to address the new segment

NBFC license will help PayU expand its payment service PayUMoney and LazyPay

South Africa-based conglomerate Nasper’s fintech company PayU has received approval from the Reserve Bank of India (RBI) to operate its own non-bank financial company (NBFC), which is subject to certain pending RBI compliance

The company had applied for NBFC license earlier in February 2018, in line with its aegis PayUMoney, a secure payment solution that can be used by anyone who wants to collect payments in India.

PayU India was founded in 2011 by Nitin Gupta and Shailaz Nag. It has two business verticals – PayUBiz & PayUmoney. PayU had closed its digital wallet PayUMoney with effect from January 31, 2018.

With the newly acquired NBFC license, the company is planning to bolster its effort in laying the foundation for its long-term credit business, wherein it estimates that its consumer business revenues will be 40-50% within next three to four years.

According to the Managing Director of PayU India Jitendra Gupta, credit is the next growth driver for the fintech industry in the country thus their own NBFC license can be considered as an important milestone of the company.

“It will help us launch new product variants faster and address new segment of consumers for providing Credit on Tap though we continue to work with our partners such as Reliance Money,” he added.

With NBFC licence, the company aims to scale up its operations and customer experience.

Here are some key points to notice around PayU’s growth so far:

  • September 2016:  Acquired Indian fintech company Citrus Pay for $130 Mn. Since then, it has been focusing its energies on building its consumer vertical.
  • Early 2017: Launched its flagship product LazyPay, an online deferral payment option. LazyPay is currently live on the platforms of some popular merchants such as PVR, Box8, Zomato, Jazz Cinemas, Netmeds, Innerchef, DVois, AbhiBus, Fassos, and FreshMenu, among others
  • Currently provides online payment services in 16 high-growth markets and has over 250 payment methods and Payment Card Industry (PCI)-certified platforms
  • Covers nearly 60% of the airline business and 80% of the entire ecommerce business
  • Claims to process over $12.4 Bn (INR 90,000 Cr) of digital payments in India annually.

In line with its plans to expand internationally, the company has recently acquired Israel-based payments technology company ZOOZ for an undisclosed amount. Together, the companies aim to create a leading, global standard payments infrastructure of the future —  a comprehensive, modular, and highly flexible payment OS platform that can support evolving merchant and broader payment industry needs.

With the ZOOZ acquisition, PayU’s total sum of investments and acquisitions in global fintech will rise to more than $350 Mn since it initiated on a series of strategic moves across the globe in 2016 to open up access to new financial markets for its merchants— $119 Mn in Hamburg-based technology group for digital consumer credit, Kreditech and $18 Mn in Mumbai-based fintech company PaySense.

Recently, Indian ecommerce company Flipkart also applied for an NBFC licence to focus on consumer lending, while Gurugram-based P2P lending startup Faircent had received its non-banking financial companies (NBFC)-Peer-to-Peer (P2P) certification from the RBI (Reserve Bank of India) in May 2018.

Some of the major players in the NBFC space are Power Finance Corporation Limited, Bajaj Finance Limited,Mahindra & Mahindra Financial Services Limited, Muthoot Finance Ltd among many others.

With Indian fintech market which said to be worth $2.4 Bn by 2020, PayU’s NBFC license certainly opens up the next array of growth for the company.