Naspers Group-backed digital payments firm PayU is likely to invest USD 250 million in the Indian business in the next five years, as the company extends focus on consumer offerings besides core products, according to a senior executive of the company.
Naspers Group-backed digital payments firm PayU is likely to invest USD 250 million in the Indian business in the next five years. The company looks to extend the bouquet of its offerings with a credit facility and a digibank for consumers.
"We have already invested USD 250 million in India in PayU till date and we will be very surprised if we don’t do anything like that in next five years," Amrish Rau, Chief Executive Officer of PayU India told Moneycontrol.
PayU, which offers payment gateways, point of sale devices, billing solutions for merchants and consumers, has lined up a slew of consumer offerings ranging from a credit facility to a UPI-based product and a digibank.
"We think credit is broken in India. We want to use credit as an extension of the payment services," he said. "It will change the payment experience. It will be like a ‘bill-me-later’, kind of a concept," he said.
The overhaul is targeted small-ticket transactions such as food delivery, booking rail and movie tickets. For this PayU is looking at “small ticket, large frequency, less hassle” approach.
"Owning the consumer and owning the 360-degree experience of the consumer point of view is extremely important and that's what we want to win in. That's why we are coming up with these consumer-facing products," he said.
Rau said over the next 12-18 months PayU will clearly get into the digibanking space wherein the company would provide all services from holding money to completing payment transactions for individuals.
“Currently about 2 percent (of business) come out of consumer payments. We clearly see that consumer payments space will grow at least 5 to 10 times over the next 12 months,” he said.
Last September, parent PayU Global had acquired CitrusPay in a USD 130-million all cash deal. Rau, the then Managing Director of CitrusPay, was roped in a Chief Executive Officer of Pay U.
Since the acquisition, the company has nearly doubled in monthly transaction volumes to Rs 6,000 crore in January from Rs 3,200 crore, Rau said. PayU now targets to clock in Rs 12,000 crore in the next one year, he added.
PayU Defines Competition
Mobile wallet operators such as Paytm, Mobikwik and Freecharge benefited from the government’s demonetisation drive. Rau, however, said PayU isn’t fixated on mobile wallets while asserting that the company will compete with any form payment transaction platform. He claimed that 98 percent of all digital payment transactions are card-based while the rest 2 percent take place through wallets.
“Whatever the form factor that the consumer is happy with — credit card, debit card, internet banking services or wallets and now even UPI — we will compete any of those payment transactions," he said.
The PayU CEO looked impressed with the Unified Payments Interface for cashless transactions and termed it an “interesting model” which is consumer and merchant-agnostic and gives best experience to both the parties.
"Conceptually it is the right way to go if you open up (the ecosystem). We see UPI as the Android of the mobile payments market," he said.
Rau was quick to add that now the remonetisation is almost complete, “Cash is back in the economy. Now, consumer loyalty will change around."