PayU planning to set up Digibank service by 2018

Financial technology firm PayU is planning to set up a Digibank service in the next 12-18 months and expects to clock revenues of $100 million (Rs 654 crore approx) by March 2018.

"Our long-term plan is to set up Digibank which will look at easing account opening for youth and provide banking services to those who are unbanked and have no access to credit. We plan to set this bank in next 12-18 months," PayU CEO B Amrish Rau stated.

He said that the company will not require to set up a brick and mortar structure for the Digibank.

PayU at present provides financial technology to merchants for facilitating online payments.

Rau said that PayU witnessed transactions worth Rs 6,000 crore on its platform in January which the company expects to double over the next one year.

"We have over 3 lakh merchants using our platform. We count one entity or company as one merchant and the base is growing every month. When we start Digibank, we will tie up with others that will host our customers. It will be hassle free banking along with our own financial products," Rau said.

PayU has Pre-paid Payment Instrument license under which it operates.

"We have started providing credit to individual customers using our platform. It is in the range of Rs 1,000 to Rs 2,500 without any documentation and is instant, based on credit profile of the customer. PayU is open for acquiring firms that operate in the credit business segment," Rau said.

PayU India COO Shailaz Nag said that late last year, the company invested around Rs 44 crore in consumer lending startup ZestMoney, along with Ribbit Capital and Omidyar Network. PayU also picked up 20% in the startup.

He said Aadhaar will become central to business of PayU gradually.

"We are going to come out with a UPI-led payment product. Faster payment is really how you do a quick transaction and get on with it. How do I use a mobile number to create a transaction? It could be a QR code, it could be UPI or it could be NFC. We will invest in faster payments," Nag said.

PayU is owned by South Africa-based Naspers which owns OLX. Naspers has made significant investments in entities like MakeMyTrip, Tencent and Flipkart.