Re­serve Bank Li­cence for PayU to Open NBFC Arm

With PayU Credit, the com­pany is look­ing to ex­pand its suite of credit-fo­cused of­fer­ings

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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

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