PayU India Shuts Down BNPL Prepaid Card Service Lazycard

SUMMARY

The decision to shut LazyCard, a prepaid payment instrument backed by a credit line, resulted in reduction of losses and enhancement of overall profitability, Prosus said

PayU India launched LazyCard in 2022 after the RBI said that loading of credit lines into non-bank prepaid payment instruments like prepaid cards and wallets is prohibited

PayU India recorded total revenues of $211 Mn in H1 FY24. India accounts for 48% of PayU’s core payments revenue

PayU India has shut down its LazyCard, a prepaid payment instrument backed by a credit line, its parent company Prosus said in its half-yearly financial report.

The decision to shut LazyCard resulted in reduction of losses and an enhancement of overall profitability within the group’s fintech and payments portfolio, Prosus said.

“The payments and fintech segment’s consolidated revenue grew 21% to $497 Mn, driven by India payments, India credit, and Turkey. The consolidated trading loss narrowed by $62 Mn in local currency, excluding M&A, to $22 Mn due to improved profitability in GPO, Turkey and savings from the closure of India’s LazyCard business,” Prosus said.

PayU India launched LazyCard in 2022 after the Reserve Bank of India (RBI) said last year that loading of credit lines into non-bank prepaid payment instruments (PPIs) like prepaid cards and wallets is prohibited.

Following the RBI’s move, reports surfaced that LazyPay was considering changing its offering ‘LazyCard’ to a credit card.

The RBI’s notification on the Prepaid Payment Instruments-Master Directions (PPI-MD), which prohibits loading of non-bank PPIs with credit lines, stirred concern within the fintech ecosystem last year, with many startups changing their business models to adhere to the guidelines.

Meanwhile, PayU’s consolidated revenue surged 21% year-on-year (YoY) to $497 Mn in the first half of the financial year 2023-24 (FY24) from $412 Mn in H1 FY23. Lending verticals LazyPay and Paysense saw their cumulative revenue surge 16% on a yearly basis to $57 Mn in the period under review.

PayU India recorded total revenue of $211 Mn during the period under review, an increase of 15% over the same period last year. Currently, India accounts for 48% of PayU’s core payments revenues.

“The payments and fintech segment operates profitable core PSP businesses, and a rapidly scaling credit business in India. It delivered a strong 1H24 result in the core PSP and credit business, with revenue growth and improved profitability, despite pending regulatory approvals in India that are also impacting peer PSPs,” Prosus said.

“The regulatory approvals relate to onboarding new online merchants while we continue to provide payment services to our existing online merchants,” it added.