Naspers Group-backed digital payments firm PayU, which offers payment gateways, point of sale devices, billing solutions for merchants and consumers, is betting big on the Indian online payment system at a time when the Government is promoting a cashless economy. PayU India's CEO Amrish Rau and its co-founder and COO Shailaz Nag spoke to BusinessLine on the company’s plan and the trends that will dominate the fintech space this year. Excerpts:

Its been over six months since you acquired Citrus Pay, how has the merger fared for the company?

Shailaz: With the acquisition of Citrus Pay, PayU India is now the biggest fintech player in India, catering to majorly all the segments under the digital payments landscape.

Combining the merchant base, product line-up and the cultures of the two giants, PayUIndia has emerged as a full stack payment provider. The integration process has been seamless and within five months of working together, the company boasts of a 45 per cent combined growth.

How soon do you think you will turn profitable?

Amrish: Next year we should get to about $100 million from both consumers and payments. We believe that while the market has not started, PayU India is at a stage where in 12 months’ time the company will be able to double our monthly transaction value to about ₹10,000 crore.

Shailaz: In the next 12 months my entire payments business will be profitable.

As a company we will not be. Credit and consumer side we will continue to invest. But our payments business (merchant side of business) which is today 97 per cent of our revenues, will be profitable in next 12 months.

How do you plan to transform digital payments in India?

Amrish: Credit is something we will invest in, along with making the payments faster. Second, we are going to go after UPI in a big way. We are enabling UPI on a merchant side, we are going to come out with a UPI-led payment product. Faster payment is really how do 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. Perhaps, it could be newer way of transaction where the money can move between me and you faster. So, we will invest into faster payments and obviously in our core around payments.

Third, in the long term we want to develop a digital banking solution for India. That’s the area we want to grow into, however that is on the consumer side, and that is how one can become more relevant to the Indian consumer.

What kind of investments will go into all this? Any acquisitions?

Amrish: We can invest anything up to $250 million in the next 5 years. We are scouting for investments in the credit business segment. Late last year, we invested $6.5 million in consumer lending start-up ZestMoney.

What are the trends that will dominate fintech, especially payments, in India this year?

Amrish: 2017, for me, is going to be the year of going back to the basics. It will not be a year of buzzwords and sexy acronyms. It will be the year of world-class platforms and technology services and of handling amazing volumes. It will also be a year of incremental product growth rather than disruptions, as far as India is concerned.

The focus should and will be on making the transaction flow easier to understand for the middle-aged and not just millennial.

What is the future of e-wallets?

Amrish: I have, for long, been a member of the camp that believes wallets are going to be dead with UPI coming in. In fact, with faster payments coming in, wallets, as a concept is ready to die. We clearly realise that wallet is not the way that you are going to win a consumer and obviously did not push forward with that.

Shailaz: Consumers are going to ask for convenience to make payments using any form factor and that is what everyone needs to be ready for.

That world is not going to operate in payments. For digital payments you have to give the choice to the consumer how they want to make a payment transaction and I think that’s where PayU has remained extremely nimble. We have not gone down the path of betting on one payment type. We said let’s go with everything.

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