PayU India Posts $444 Mn Revenue In FY24, Growth Slows To 11% Due To Restrictions

Prosus-owned PayU India’s revenue grew 11% year-on-year (YoY) to $444 Mn in the financial year 2023-24 (FY24), the investment group said in its annual report. 

However, this was lower than the 31% revenue growth in FY23 and over 40% jump in FY22 as the company was unable to onboard new merchants due to its pending payment aggregator application with the Reserve Bank of India (RBI).

PayU received an in-principle authorisation from the Reserve Bank of India (RBI) to operate as a payment aggregator (PA) in April 2024. Only after the nod, which came after a 15-month “embargo”, the fintech company was allowed to onboard new merchants for its payments business. 

Prosus attributed the growth in the revenue of India business to rise in volumes from its existing merchant user base and growing “value added” services. The company also said that PayU India’s total payment value (TPV) grew 22% YoY. 

However, the company’s payment service provider (PSP) business reported a 3% trading loss in FY24 as against a 3% trading profit in the previous fiscal. Prosus said this was due to the “change in merchant and payment method mix (predominantly driven by the embargo)”. 

Despite this, the Indian market continued to be the largest contributor to PayU’ PSP business, accounting for 46% of its global payment operations revenue and 60% TPV in FY24. 

Meanwhile, PayU India’s credit business, which comprises buy now, pay later (BNPL), personal loans, and a pilot on providing loan services to small and medium businesses, registered a growth in terms of revenue but saw its loss widen during the fiscal. While its revenue grew 29% to $107 Mn, trading loss widened to $20 Mn in FY24 due to “continuous investment in building the merchant lending portfolio and relatively stable loss from 2.5% in FY23 to 3.1%”. 

The company said that the uptick in the revenue for India credit business came despite a slowdown in issuance of loans as a response to evaluate new regulations shared by the RBI. 

It is pertinent to note that the central bank has taken a number of steps over the last few quarters to better regulate the digital lending space and curb the sharp rise in unsecured loans.

On the outlook for PayU, Prosus said, “We are present in high-growth markets and we will continue to emphasise India. With the in-principle authorisation by Reserve Bank of India to operate as a payment aggregator and onboard new merchants, India is expected to demonstrate strong growth in payments.”

It added that PayU’s credit business is likely to benefit from increasing demand for credit in India. 

On a consolidated basis, PayU’s revenue grew 22% to $1.1 Bn in FY24. It also managed to cull its trading loss to $67 Mn, a 23% improvement from FY23’s $83 Mn. The company attributed this improvement to the “closure of the loss-making digital bank offering in India and cost optimisation”.

In the fiscal, PayU shut its LazyCard, a prepaid payment instrument backed by a credit line. In November 2023, Prosus said that the decision resulted in reduction of losses and an enhancement of overall profitability within the group’s fintech and payments portfolio. 

It is pertinent to note that PayU India is said to be eyeing a public listing in 2024.