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With the current COVID-19 pandemic, several large-scale businesses have dealt with a massive blow, while medium and small scale businesses are struggling to keep their head above water. To reduce losses, several businesses have started laying off people by the hundreds. Thousands of people are being given the sack almost daily, and several families are in desperate need of extra cash to keep their lives from crumbling down.
Digital lending is a $1 trillion opportunity (PDF) over the next four and a half years in India, according to estimates from Boston Consulting Group.
Banks are also scrutinizing the amount of loans given out, in fear of not getting back their loans. At this juncture, there’s one solution everyone’s running towards, and that is online money lenders. And in this article we’re going to take a look at one such money lender – LazyPay. But before we get into what LazyPay’s business model is and how it works, let’s take a look at its parent company, PayU.
Frustrated Beginnings
It’s most often the case that something frustrates a user so much that they go on to create a world-renowned product that’s appreciated by millions of people. PayU is no different. Jose Velez, Martin Schrimpff, Arjan Bakker, Grzegorz Brochocki, Nitin Gupta, and Shailaz Nag went on to create one of the best ways to securely make and receive payments online.
PayU was launched in 2002, and it instantly became a hit, with new online stores opening up almost every minute owing to the massive internet dot-com bubble. Fast forward to 2018, and PayU’s indian faction, PayU India, was reported to have around three million faithful merchants using its platform in the country. It’s a story that deserves its own 1000-word article. In 2017, PayU India realized the massively underpopulated credit market in India, and decided to capitalise on it.
Creating LazyPay
Taking a loan can be a hassle – the tiring trips up and down different banks, the endless waiting outside the bank manager’s office, the piercing looks from managers – it’s all a big heart-breaker. Especially when you need the money for some kind of an emergency. Alternatively, you could go to the local pawn broker, but the interest rates at these shady places can sometimes go up to 35%, and that is no small fee. So between the sharp blades of the banks and the sky high interest rates at the local seths, where should the troubled Indian man go? Nitin Gupta’s PayU recognised these problems. The solution was a simple yet brilliantly executed plan – LazyPay.
What is LazyPay?
Simply put, LazyPay is your all-in-one payments service that helps you use credit to make easy payments on purchases, as well as take loans upto 100,000 INR at considerable interest rates. EMI payments are made easier, with options to choose how much you want to pay back every month. So how does LazyPay work?
How Does LazyPay Work?
LazyPay makes getting loans as easy as possible. It does this by having you register yourself on the lazypay app, with a few basic mandatory fields like your phone and email. Once the verification is done, you’ll need to fill out your profile. And that’s all there is.
Note: A credit limit is allocated to your account, but to access it, you will need to agree to LazyPay’s terms and conditions, and provide your PAN number in the process. You will need to complete your KYC during this process, which is essentially submitting proof that the person operating this account will be you.
Once this is done, you get access to a lot of famous e-commerce merchants like Amazon and Flipkart, that most people use every day. Lazypay supports payments on 250 such sites, so you can directly use this app to purchase products and services with relative ease.
Now, to do all of this, Lazypay needs good revenue. And while it can play around with investors’ money all it wants, there’s only so much you can spend. How does Lazypay get back its money? Let’s take a look.
Revenue Sources – How does it make money?
Shop On The App: By creating a payment wallet system, LazyPay can get customers to pay using its platform without them having to choose another one to shop for products. Be it ordering food on Swiggy or tickets on BookMyShow, or even purchasing tourist packages on MakeMyTrip or shopping on Myntra – LazyPay has a wallet option that can be used in all of these sites. The revenue that comes from making these direct purchases is a major reason for LazyPay still floating around in the market.
Voucher: LazyPay also gives out vouchers for you making a loan request on the app. All you have to do is choose the amount you want, and the duration upto which you’ll want the installments to last (typically between 3, 6, 9 and 12 months), and you’ll be given a voucher code that you can use to purchase from whichever shop it is that you’d like to shop on. Sometimes, these vouchers also come with EMI discounts, so watch out for those as well.
Scan and Pay: The above options work great if you’re shopping online, but what if you went out with your friends and ran short of cash? Lazypay thought of this as well, and it has its scan and pay feature ready for such situations, so you don’t change apps that easily.
UPI Payment: If there’s a scan and pay feature, then there has to be a nationally accepted UPI feature as well. To send payments to any vendor or person across the country, you can use a unique UPI code generated by LayPay for each user. It’s completely safe, secure, and fast.
To add to this, LazyPay makes itself harder for users to resist by offering easy loans ranging from INR 12 to INR 100,000. And that has helped it gain a massive amount of following in the three years it’s been in business. Let’s see who really propels LazyPay’s business, and why these people do so.
Target Audience – Who are they looking at?
LazyPay is really for everybody who needs a loan, but its core fans remain the average college kids, who spend a lot more than one would imagine. Hanging out with friends, partying, buying study materials, and even paying fees can have its toll, so such students easily log on to the app and get their required payments transferred to them almost instantly.
You can also track all of your pending EMIs and loan repayments on the app, and choose which ones to close, if you’ve got the cash ready. All this makes the 20-30 year old Indian feel much at ease without having to worry too much about their financials. And LazyPay’s business model makes sure LazyPay holds on to its key members. How? Let’s find out.
How LazyPay Retains Its Customers
No matter how good a product, people will not stay for long, if they don’t get anything valuable out of it. LazyPay realizes this and so it has created a great interface that people keep coming back to. The app is comfortable and easy to use, and doesn’t feel very cluttered. You don’t have to remember card details or any of those credentials, so that’s a plus.
The ability to use LazyPay nearly anywhere and everywhere is something that really hooks its customers. LazyPay also lets its best feature get all the glory it can. It makes getting loan payments really easy, and gets out of your way once it fulfills its purpose. So you know where to go to get a loan as quickly and as efficiently as possible. That is LazyPay’s ultimate selling point – get the customer what he/she wants, and get out of the way.
Let’s Talk Numbers – Funding and Valuation
PayU recently invested an additional 50 crores INR on the money-lending platform, which brought them around 8,064,516 shares at around 52 INR per piece. This is in addition to PayU’s acquisition of LazyPay from CitrusPay in 2016, which amounted to around 30 million USD back in the day.
There are more than 300,000 merchants who are being supported by PayU, so LazyPay is in safe hands. Let’s not forget the millions of consumers who make payments online with over 250 payment methods and over 1800 payment specialists through PayU’s payment mechanisms. PayU also operates in Central Asia and Eastern Europe, across Latin America, the Middle East and Africa, so there’s a potential 2.3 billion people that can be led to use LazyPay. And this has attracted a lot of investors to the platform.
In June, LazyPay recorded over 100,000 merchants through international payments. Now the app is trying to grow its avenues throughout merchants, especially the MSME segment. The app also recorded a 92% spike in revenue in March to 84.8 million USD compared to 44.35 million the year before.
Closing Thoughts
LazyPay is not the first solution to this money crunch problem that’s bugged millions. There are a lot of apps like LazyPay, the most promising ones being SimplyPay and EpayLater. But LazyPay has been able to cement its position well and dominate the market. The way it did this is by strongly accepting what people want, and then delivering what they want. It’s as simple as that. The most recent numbers prove this point. LazyPay has raked up to 400,000 on the money lending platform, with lending amounts soaring well past a total of 4 million USD. And that number is just starting to rise, with the given COVID situation.
