PayU India, the payments and credit-focused arm of Prosus, recorded a revenue of $237 million from its core payments business for the first six months of FY25, reflecting a 12 percent growth over the same period last year.
The fintech major attributed a 25 percent surge in total payments in value (TPV) on the back of businesses from financial services, government, and e-commerce.
The lifting of regulatory restrictions in April 2024 allowed PayU to onboard over 4,000 merchants, giving its payments business significant momentum after a challenging period, the investor said. “The business has gained momentum with over 4,000 merchants onboarded since the regulatory embargo was lifted in April 2024,” noted the company’s annual report.
PayU’s payments segment showed signs of recovery, with adjusted EBIT margins improving to -5 percent, despite challenges. “Shifts in payment mix have placed pressure on take rates which, in turn, weighed on the performance,” the report added. Take rate refers to the commission the company earns.
The company’s credit business reported a 91 percent jump in revenue, reaching $82 million, supported by a 63 percent growth in loan issuances to $592 million and a similar increase in its loan book to $552 million. Its SMB lending segment contributed 15 percent of total loan issuances.
PayU remains cautious about the origin of credit. “We remain focused on building a quality book within optimal risk-and-return guardrails, particularly in an evolving regulatory environment,” it stated. "The EBIT margin for credit business has improved to -23 percent from -35 percent (a year ago) in 1H24, despite higher credit losses and provisions on consumer loans."
PayU’s faced major challenge in FY24 when a 15-month regulatory embargo by the Reserve Bank of India (RBI) restricted it from onboarding new merchants. The ban, lifted in April 2024, had impacted its FY24 growth, leading to a trading loss of 3 percent, down from a profit in the previous year.
With the RBI granting in-principle approval for its Payment Aggregator licence, PayU has re-entered the market with renewed focus. “India payments is at an inflection point after the regulatory challenges,” the report said, signalling optimism for sustained recovery and growth in the coming quarters.
Prosus-backed PayU sees 22% surge in revenue on the back of India payments business
Global contribution
The revenue from overall payments and fintech segment grew 28 percent to $636 million, with major contributions from Turkey (Iyzico), Global Payments Organization (GPO) and India credit. "The combined EBIT improved by 50 percent to a loss of $11 million, reflecting continued investment in our PayU India credit operation and the Indian PSP business.
India contributes about 48 percent of PayU’s core payments revenues. The Dutch technology investor hopes to list PayU next year, after clocking a $2-billion gain on its investment in another venture, Swiggy.
On question around a probably timeline of PayU public market debut, Prosus' CEO Fabricio Bloisi said, "For around 12 months, we (PayU India) were not growing due to regulatory challenges. However, the last 3-4 were very good for PayU. Since April, we have added 3,000 customers, and have a lot of growth there. We're excited about the growth in the payment area as well as credit opportunity."
"We are quite confident that PayU is going to keep performing well," the CEO said during the earning calls to discuss the results.
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