Interview with Nadav Naaman, Chief Product Officer at PayU

PayU is the fintech and e-payments division of Prosus, a global consumer internet group and one of the largest technology investors in the world. At PayU, we provide businesses across the world with cutting-edge financial services tailored to the needs of high growth markets. Our operations span 20 markets across Asia, Central and Eastern Europe, Latin America, the Middle East and Africa, where we offer customers a range of payment and consumer credit solutions aimed at increasing financial access.

Ultimately, our vision is to create a world without financial borders where everyone can prosper. Currently over 85% of the world’s population live in emerging markets, and a staggering 1.7bn are unbanked, so the path ahead is still a long one.

We’re also one of the most active investors in the fintech space, and we’re always looking for opportunities to further innovation and build out our financial services offering. Last year we acquired Wibmo, an industry leader in digital payment security and mobile payment technologies, and, through acquisitions of iyzico and Red Dot Payment, we expanded operations into Turkey and Southeast Asia respectively.

How did the idea for the company come about?

I came to PayU through its acquisition of ZOOZ, a world-leading payment platform, back in 2018. I wasn’t there at its inception, but I can speak to its ambition to enable innovation in financial services across the globe. PayU is a truly global company, operating across over 20 markets.

PayU was born out of Naspers Group, now Prosus, and the lack of a dedicated global player that specifically served emerging or ‘high-growth’ markets. As with ZOOZ, PayU is, in part, made up of locally born businesses that have integrated with the larger entity to form a global payments provider that is fully immersed in the fintech ecosystem.

How has the need for PayU evolved during the pandemic?

When COVID-19 hit in early 2020, e-commerce exploded across the world as consumers grew accustomed to not being able to shop in physical stores. Online retail sales in March grew 74% in average transaction volumes compared with the same period in 2019 according to ACI Worldwide. As a result, some e-shops across PayU’s markets saw year-on-year revenue growth of up to 1000% during April and May 2020. It wasn’t just domestic e-commerce; cross-border commerce also grew exponentially.

As a result, we saw a huge spike in merchants looking to take advantage of the e-commerce boom. Businesses sought partners that could help them to quickly scale operations, divulge local experience and offer seamless online payment options. These are three things that are core to our offering and business like ours became vital for sellers as the pandemic progressed. In the second half of April alone, PayU saw nearly 1,500 new merchants sign up for its online payments solution in Colombia. April also marked the highest number of SME merchant registrations that PayU Poland has ever seen for its payment solution in one month.

The rise in e-commerce saw a corresponding increase in fraudulent activity. Average fraudulent attempted purchase value grew by $36 in March, with fraudulent attempted transactional value increasing by 13%.

Research found that a third of consumers say that guaranteeing that their financial data remains secure is more important to them now than it was before the COVID-19 outbreak. For PayU, this means that our secure payment systems have become absolutely vital, especially for small merchants with limited expertise in the field.

How does technology underpin PayU’s offering?

As one of the most active fintech investors in the world, we strongly believe that our technology is shaping the future of fintech. We understand how to deliver practical innovation, delivering solutions that fit the needs of local markets, rather than take a ‘one size fits all’ approach. For instance, in India we invested in PaySense, a business which uses India Stack to create a digitised infrastructure across government and business services. It’s this local approach which makes us invaluable to our merchants.

Technology is an integral part of how we connect this local expertise with our global reach. The epitome of this is the PayU hub. Through a single API integration, merchants can take advantage of the over 400 payment methods we process and access 2.3bn potential consumers in high-growth markets. Developing this world-leading hub was made possible through our acquisition of ZOOZ in 2018.

We are also actively building an in-house data science team to develop Machine Learning underwriting models. These models use the transaction and purchase behaviour data from PayU’s Buy Now Pay Later products in Colombia (PayU Te Fia) and India to inform their algorithms. With this, we can offer credit to people who are overlooked by traditional lenders, using their shopping behaviour to build a solid financial picture.

We’re also using Machine Learning for our antifraud products as well, and are leaders in Colombia and Brazil with platforms such as FControl (Brazil). In short, technology underpins everything we do, whether it’s security or local payment processing.

What can we hope to see from PayU in the future?

Our ultimate vision is to create a world without financial borders; one in which everybody can prosper. This is an ambitious target, but we’re confident that everything we’re doing is bringing us one step closer to making financial inclusion ubiquitous.

As part of this vision, we’ll continue to invest in partners who will help us operate in new markets and shape the future of fintech. We’ll continue building leading financial services products for our markets, and integrating them with our global capabilities wherever possible.

Over the coming months, we’re also going to be helping emerging e-commerce leaders extend their customer base in high-growth markets. We know that with our market leading payments technology and relationships with local acquirers, we can offer emerging e-commerce leaders higher conversion and approval rates for things like subscription services. I have no doubt that through sharing our expertise with local and global players, coupled with the ever growing appetite for e-commerce, we can help kickstart local economies and the post-pandemic recovery.