Online payment service provider PayU India, a Naspers-owned company, has received approval from the Reserve Bank of India (RBI) to operate as a non-banking financial company (NBFC). This is will help the digital payment company push growth in the consumer credit segment.
PayU, one the largest payment gateways in the country, earlier this year shut its mobile wallet service to focus on micro credit. It currently offers credit through LazyPay, a deferred payment product. The Gurugram-based company has recently launched an instant app-based personal loan service.Through this, customers can avail loans between Rs 100 and Rs 1 lakh and can repay them in 15 days to 24 months.
“The NBFC licence is a very important milestone in our credit journey. It will help us launch new product variants faster and address new segment of consumers for providing credit on tap, though we continue to work with our partners such as Reliance Money,” Jitendra Gupta, managing director, PayU India, said in statement.
PayU, which processes over Rs 90,000 crore annually on its payments platform, has also been investing in smaller fintech companies. In July, it invested $11.5 million in PaySense.
“India offers a bigger opportunity in the form of access to credit and other financial services. The country has an untapped opportunity in credit, as it has 36 million credit cards and 846 million debit cards as of January 2018,” Laurent Le Moal, chief executive officer, PayU, had told Fortune India in an email last month.
Analysts expect the digital payments industry to eventually move to lending, banking, and insurance. A 2017 fintech trend report by PwC says that alternative lending is a growing industry for digital lending aimed at different borrowing needs, including consumer loans, SME loans, working capital loans, and payday loans, among others.
“The most interesting challenge in India and our other growth markets is the heavy reliance on cash. This gives us an opportunity to innovate and offer products and services that are inclusive and support all consumers, including those who rely on alternative payment methods,” Moal had said.
