PayU India takes NBFC route for consumer credit

By: | Updated: February 20, 2018 4:44 PM

Naspers-backed PayU India has sought a non-banking finance company (NBFC) licence from the Reserve Bank of India (RBI) to enter the consumer credit business, a senior executive of the company told FE.

PayU India, NBFC route, consumer credit, Reserve Bank of India, Lazypay product range, digital wallets, NBFC licence, NaspersPayU India is a provider of payment gateway services and the issuer of the digital Citrus wallet.

Naspers-backed PayU India has sought a non-banking finance company (NBFC) licence from the Reserve Bank of India (RBI) to enter the consumer credit business, a senior executive of the company told FE. Pallav Jain, consumer business head at the company, said it would offer loans in the form of a credit line to a customer checking out of a merchant site with whom PayU has a relationship. “We are present on the check-out. The credit line will be for the customers through a proper NBFC licence. We have already applied for it and it is expected anytime now,” he said. Jain added that offering a credit line is the logical next step for the company, which launched a payment feature called Lazypay for its merchant partners a few months ago. The feature allows a consumer to pay later, with a credit limit of up to Rs 10,000. “Merchants came back to us and told us that retention rates are far higher–70% or more–in Lazypay than is the case for conventional payment instruments,” Jain said, adding, “Then they asked us, ‘Why don’t you provide something like an EMI?’”

PayU India is a provider of payment gateway services and the issuer of the digital Citrus wallet. In the last few months, it has shifted focus away from the wallet business after the Reserve Bank of India (RBI) made it compulsory for issuers of prepaid payment instruments (PPIs), including digital wallets, to ensure all their users comply with know your customer (KYC) requirements. Jain said delinquency rates in the Lazypay product range are between 1 to 2%. PayU is targeting 10 million users of the feature in the next 18 months. It is targeting the enrolment of 100-150 merchants for the product over the next six months. At present, it has over 50 merchant clients using Lazypay.

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