'We Process Around A Billion Dollars In A Month Basis Out Of Digital Transactions'

"We process around a billion dollars on a monthly basis of only online digital payment transactions." Says Amrish Rau, CEO, PayU India while describing the work his startup has been doing with respect to the credit payments of India. In an exclusive interview with BW Businessworld Amirsh also talks about the importance of small ticket sizes of credit through LazyPay.

What made PayU into one of the most frequently used online payment gateways? How much do the monthly transactions sum up to?
PayU right now is the biggest payments company in India. We process around a billion dollars on a monthly basis of only online digital payment transactions. PayU got created out of the startup and expanded after acquiring my company Citrus Payments in November 2017.

As a part of that transaction, I got to be the CEO of the company and I run the entire PayU business. The philosophy behind PayU's creation was digital India. With the country going digital more and more businesses require electronic payments for completion of their transactions and if we can be the one stop providers for all payments facilities and online businesses, we have a huge market in front of us. It was this mindset that provoked us to start PayU. At the time of the merger we had Rs 3300 crore for transactions on our portfolio last October and now we have reached nearly 6500 crores on a monthly basis.

How does LazyPay encourage the credit industry of India?
When you look at the credit environment in the country then you will find that there are only 25 Million credit cards in India and many banks and financial institutes have suffered significant losses in this segment of the business. We have an opinion where we say that Indians would want to get access to a credit line and they would also want to have a faster mode of payments. Hence we reached a conclusion that consumers are going to separate out the experience of doing a transaction and getting a credit at the same time. We also understood that consumers would want to segregate purchase and payments so when we took both the conclusions together we came up with LazyPay. It allows consumers to pay money at their own convenience but it also allows consumers to purchase a product with the fastest methods possible.

How active has PayU been on the investment front?
We knew that as PayU while we build our hypothesis around LazyPay and how it can provide credit and a checkout experience, we will need to come up with a larger payment credit product. Which led us to invest in companies including Kreditech, ZestMoney, PayCents where we have a stake in the companies. While we hope to see those companies grow, the products that we have in our stable 'LazyPay' is where he hopes the growth happens up to 100%. Hence we are very bullish about the credit's play in India and that's what we want to push into the Indian market.

How is LazyPay a better credit provider to the consumers?
LazyPay is a classic 'buy now pay later' product which is not focused on giving large credits to an individual. We have a system where we are building a trust model which helps us in concentrating on our partners and online merchants who are very happy to receive their money in 14 days' time. They along with us trust the consumer. LazyPay is not giving credit to those who don't hold a credit card or is not trying to give credit to those people who have a credit card which is fully utilized. At LazyPay our credit limit is Rs.3000 but what we mainly target on selling the average ticket sizes of Rs.800 to Rs.1000.

What do you do in case a consumer doesn't pay back the money he owes? 
That's one part of the credit side where we have worked massively. We say that as PayU we are present in more than 50% of all e-commerce merchandises today and we are building a trusted core for the individuals in the online world. If we are to do so then the individual is going to be extremely careful to not gain the system. We have also started observing in the short run is that for small ticket size credits consumers are very quick in returning the money. Hence with LazyPay, we are not going ahead with larger ticket sizes. We are going ahead with a short term period of returning the money with a ticket size ranging from 800-1000 INR. With small ticket sizes, tiny credit period and providing a different experience will also help us in controlling the behaviour of our consumers.

What are the ways in which LazyPay monetizes its assets?
In the space of payment gateways, we have a very strong business where we are doing a Billion dollars' worth transactions on a monthly basis. That business by January 2018 should break even and give out good returns by the next financial year. When it comes to LazyPay and faster payment sides, they are the investments areas where we want to build a new way in which the consumer uses this facility to make payment transactions and initiate education marketing methods in that space.

We make money only from merchants and we don't make money out of consumers. A consumer gets charged Rs.0 by LazyPay unless it is after 14 days. In both the cases we are targeting 2% of the transacting fee which the merchant has to pay to us and this is a classic method which we are bringing in the credit industry as well.

How would you describe the online payments industry of India?
We think that the day zero of the war has not arrived yet. The war bugle has not even sounded and we are in that environment where we are just building up the artillery and infrastructure before we head out for the war. By war I mean is the online payments industry and I feel that the industry has to yet start. We are only enabling businesses to accept payments, we are enabling consumers to have multiple ways of electronic transactions. But the real transaction growth is at least 3-5 years away from today.

Is India in need of micro credit transactions and how does PayU bridge the gap?
India is credit starved and it is believed that for the Indian economy to grow, the credit must flow. It is not acceptable to know that we have got only 25 Million credit. We are in the camp that says the number of Indians who can and will get credit will grow exponentially and we may leap frog the system of owning a credit card.  Hence to make payment transactions consumers will use a debit card but to avail credit, they will go to digital financial systems and that is the journey we want to win.