Where is PayU Headed? Follow the Money

Emerging markets payments platform PayU is building an in-house data science team.

The company’s latest rounds of investment and acquisitions pointed to something big, and this seems to be part of it. For instance, late last year PayU’S parent company Naspers invested $115 million in remittance startup Remitly. This was preceded by a €110 million ($127.8 million) in German online lending company Kreditech Holdings.

PayU operates in 17 markets and processes about 1.2 million payments daily.

Both moves are consistent with what head data scientist David Lin told Bank Innovation today.

“We are actively investing in companies that are using alternative data – whether that’s behavioral, social, financial and/or purchase data — to gain insights into how consumers make financial choices and to extend credit beyond traditional credit bureaus and banks,” Lin said.

Nasper invested $5.3 million in series A funding round in PaySense, a company that give Indian consumers access to lines of credit based on an alt-data scoring model. PaySense utilizes India Stack (Aadhaar ), a biometrics database that also houses financial data to create a digitized infrastructure across government and business services in India. As with others, this acquisition signals to PayU’s ambitions to further solidify themselves in the Indian market.

“India is a great example of where PayU is working to reach the underbanked,” said Lin. “Our data science team is developing machine learning [ML] underwriting models using the transaction and purchase behavior data from our payment platforms.”

Such underwriting models are leveraged for PayU products like Te Fia, which enables a user to make online purchases on credit in Colombia, and LazyPay, an online buy-now, pay-later service in India, to help access creditworthiness.

PayU shut down its mobile wallet service in India this year to focus on credit products. Wallet services are still available through the Citrus Payment solution, acquired by PayU in September 2016.

Following the trail of investment by PayU, more alternative credit solutions for India should emerge.

1 - Reader Likes This Post