Reserve Bank Licence for PayU to Open NBFC Arm
With PayU Credit, the company is looking to expand its suite of credit-focused offerings
New Delhi: PayU India has received a licence from the Reserve Bank of India to operate its own non-banking financial company, a development that will provide a big boost to the Naspers-owned fintech major in growing its consumer credit business.
PayU India managing director Jitendra Gupta will head the new initiative, PayU global chief executive Laurent le Moal told ET.
The NBFC, PayU Credit, which will be a subsidiary of PayU, is the latest offering from the company that looks to expand its suite of credit-focused offerings.
Over the past two years, PayU has doubled down on the space, ringing up a series of investments and acquisitions in India, which has emerged as its largest market and is home to among the most financially underserved populations globally.
“With payments, we have access to data, and we generate data… For us, when we look at the market, the new aspirational class coming in, they need access to financing. We give financing to the consumer, which, in turn, reinforces business with merchants… This is not a market where one company can dominate,” le Moal said.
PayU India, which processes monthly payments of about Rs 8,000 crore, derives only about 2% of its overall revenue from its credit busi- nesses currently. Globally, the company contributes about 47% of its parent’s total payment value, according to reports.
According to the global CEO, the strategy will be around building a platform consisting of three primary components — data, utilising the company’s balance sheet, and suite of products aimed at both consumers and merchants.
PayU, according to company executives, has an estimated 4,00,000 merchants on its platform.
“We see the (Indian) consumer credit market as a trillion-dollar market currently… We feel that our platform approach will address this by bringing in different lenders, our balance sheet, partnering and investing in other companies, so that we can address the different segments of credit needs,” Gupta said.
In July, PayU invested $11.5 million in PaySense, which provides instant loans to consumers, including those without credit cards. In 2016, it acquired a 20% stake in digital lending platform ZestMoney, which also counts Chinese smartphone manufacturer Xiaomi as an investor.
According to both le Moal and Gupta, PayU is also scouting for fresh bets in insurance and wealth management.
While they did not provide specific details, the Gurgaon-based company is in the process of beefing up its mergers and acquisition team.
In July, PayU invested $11.5 million in PaySense