PayU, online payments service provider and Prosus’ fintech arm, is expecting a three-fold-jump in GMV (gross merchandise value) to $100 billion over a three-year-period.
The GMV refers to the total value of transactions carried out through PayU platforms and products.
An increase in adoption in digitisation and payment solutions by small merchants along with rising popularity of e-commerce players and their ‘sale days’ are seen as major growth drivers in a pandemic-led new normal.
ACI Worldwide, in a recent report, indicated more than 70.3 billion real-time payments transactions were processed globally in 2020 — a surge of 41 per cent compared to the previous year.
This comes as the Covid-19 pandemic dramatically accelerated trends away from cash and cheques towards greater reliance on real-time and digital payments. The report said India retained top spot with 25.5 billion real-time payment transactions. By 2024, share of real-time payments volume in overall electronic transactions will exceed 50 per cent. This will touch 71.7 per cent by 2025.
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Rise in transactions
According to Anirban Mukherjee, CEO, PayU India has doubled transactions growth rate over the last two years.
A PayU Insights report says the number of UPI transactions grew by 288 per cent and expenditure through UPI saw a 331 per cent uptick between 2019 and 2020. Payments in segments like indoor entertainment (subscription of OTT and so on), online training and upskilling courses, retail, e-commerce and financial services (insurance, etc) saw a jump; while travel and dining witnessed a dip.
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“Digital payments are witnessing an accelerated growth and the pandemic has pushed these trends upwards. Moreover, in the online sale days that took place across e-tailers like Flipkart eight out of top 11 merchants settled their transactions through PayU. There has been increased adoption across small merchants and 15X growth in transactions and settlement in this segment. So over a three year period, a three-fold-jump in GMV to $ 100 billion looks very much possible, even if there is a slight dip in momentum,” he told BusinessLine.
PayU earns primarily from service fees based on transaction volumes and values; subsricption charges by merchants and so on.
Omnichannel presence
Mukherjee adds that PayU is also increasing its omni-channel presence as it looks to provide contactless payment solutions to customers both in-store and online, through methods like QR, PoS, and others.
PayU is also expanding scope of its alternative digital credit solutions like LazyPay; and offerings under buy now-pay later or personal loan options are being increased.
The presence of Wibmo, a digital payment security firm and mobile payment technology platform, that PayU acquired in 2019 is being ramped up.
“We are currently profitable in the core payment business; while investments are on in the other verticals like LazyPay or Wibmo,” he added.
The company is also eyeing acquisitions, strategic partnerships and investments into a broader ecosystem spanning payments, credit and other digital financial services