PayU, one of India’s leading payment solution providers previously announced its plans of launching two new services — consumer credit and digital banking. However, the presence of varied credit card providers in the market drifted the company’s mind from the service. Thus, it has now ditched the plastic card concept and has come up with another product instead.
PayU India will be releasing a digital consumer credit product named as ‘LazyPay‘ by next week. The product has been developed by Citrus Pay, which was acquired by PayU for a purchase deal of $130 million last year.
LazyPay would allow users to buy first and pay later for their online purchases. It will act as an all new payment option for users and enable credit transactions without the need of a card. Commenting on the present market situation, Jitendra Gupta, the founder for Citrus Pay said,
Credit card payments have a success rate of 80-82%, with 20% drops happening due to infrastructure and network issues. Customer acquisition costs are also high.
The company will commence operations in hand with 20 merchants, giving you the option of paying later. These 20 merchants belong to different categories including food or grocery delivery and movie ticketing spaces. The company aims to integrate 1,000 merchants with the LazyPay platform within a span of 2 months.PayU is also engaged in early talks with banks to further increase the scope of the service.
The company further reasoned unviable cost structures for scrapping off credit card plans. The company had to lay off 60 employees which were hired for call centers and collections operations for the credit card business. However, the company will reallocate some of the employees under the mentioned credit initiative. Gupta further added,
But with LazyPay, it is a convenience product for anyone to pay later and the credit line can extend from Rs 3,000 and even up to Rs 2,000 to Rs 10,000, depending on the profile of the customer.
Moreover, the system is equipped with algorithms that will write off debts in real time. The said algorithms are said to be based on 80-odd variables. The new deferral payment solution does not even require any separate license or regulatory approval and hence will begin anytime soon.