Citrus Pay, the fin-tech startup acquired by PayU, has surrendered its wallet licence which was approved by the Reserve Bank of India (RBI). In the latest list of entities with Prepaid Payment Instrument (PPI) from RBI, the name of Citrus Pay is missing.
The users of the platform will now be migrated to the PayU Money wallet service. PayU Money, which processes more than 3 million transactions per day, sees only 1 percent of the total transactions on its wallet service.
PayU India CEO Amrish Rau told ET:
We had to do it (surrender the licence) since Citrus and PayU both had one. We have seamlessly migrated the Citrus consumers under the PayU licence.
Last year, RBI had issued guidelines to digital wallet companies who wish to surrender their licences. As per guidelines, the wallet companies are required to give notices to the customers indicating that they can spend the amount in wallets or opt for a refund to their bank accounts within a specified time period.
While the wallet licence is being surrendered, the companies will continue to operate their payment gateways separately for the next one year. The combined entity is said to have more than 200,000 merchants, where 120,000 belong to PayU and 110,000 belong to Citrus.
Last year, Naspers-backed payments service PayU acquired Mumbai-based Citrus Pay for a sum of $130 million. The deal is one of the largest to have ever occurred in the online payments or finance technology niche. FreeCharge was acquired by Snapdeal for a massive $450 million back in 2015, but it is now rumored to be on the market for sale — that too for as low as $150 million.
After the acquisition, Citrus Pay MD Amrish Rau took charge of the merged entity and reports directly to PayU Chief Executive Officer le Moal. Jitendra Gupta took the reins of Lazypay — Citrus Pay’s attempt into credit, while Nitin Gupta left to pursue his personal entrepreneurial ambitions.
Digital wallet services are steadily gaining popularity, as well as users in India. They’ve seen a massive surge in their downloads after demonetization and traffic to their platform has increased manifold. Paytm witnessed a 1,000 percent increase in money added to the wallets when the landmark move was announced in September last year.
Recently, Amazon India secured its licence from the RBI to operate its own wallet service. When digital wallet companies are eyeing payments to go up to 35-40 percent of total transactions in the economy, Amazon’s wallet service will mark the company’s entry into India’s fast-growing digital payments business and may prove to be a tough competition for existing players.