PayU killed its LazyCard prepaid card and cut the fintech unit's trading loss to $22M

In November 2023, parent company Prosus's half-yearly financial report disclosed that PayU India had shut down LazyCard, a prepaid payment instrument backed by a credit line that the company had launched in 2022. The card was launched after the Reserve Bank of India said that loading credit lines into non-bank prepaid payment instruments such as prepaid cards and wallets is prohibited. Prosus said the decision to shut LazyCard 'resulted in reduction of losses and an enhancement of overall profitability' within the group's fintech and payments portfolio.

The RBI's notification on its Prepaid Payment Instruments Master Directions stirred concern across India's fintech ecosystem, and many startups changed their business models to adhere to the guidelines. For PayU, reports surfaced that its LazyPay offering was considering changing LazyCard into a credit card; in the end the company closed the card business entirely.

The closure landed in a strong half. Prosus's payments and fintech segment grew consolidated revenue 21% year over year to $497M in H1 FY24, from $412M a year earlier, while its consolidated trading loss narrowed by $62M in local currency, excluding M&A, to $22M — with Prosus naming 'savings from the closure of India's LazyCard business' alongside improved profitability in GPO and Turkey as drivers. PayU India's own revenue rose 15% to $211M, and India accounted for 48% of PayU's core payments revenue; the lending verticals LazyPay and PaySense together grew revenue 16% to $57M.

Prosus credited the closure with savings as the payments and fintech segment's trading loss narrowed $62M to $22M and revenue grew 21% to $497M in H1 FY24.

The RBI barred loading credit lines into non-bank prepaid instruments, and LazyCard — a prepaid card backed by a credit line — sat exactly on the prohibited ground.

Reports had LazyPay weighing a conversion of LazyCard into a credit card, but re-papering the product was a slower, costlier route than shutting it.

The closure fed a broader profitability push: Prosus named the shutdown's savings among the drivers that cut the segment's trading loss by $62M to $22M.

India still anchors the group at 48% of PayU's core payments revenue, so cutting a loss-maker protected a business whose half-year revenue grew 15% to $211M.

When regulation removes a product's legal basis, exiting cleanly can beat re-engineering: PayU shut the card instead of converting it, and the savings showed up in the unit's loss line.

In its H1 FY24 report, Prosus described the payments and fintech segment as delivering revenue growth and improved profitability, with profitable core PSP businesses and a rapidly scaling credit business in India — 'despite pending regulatory approvals in India that are also impacting peer PSPs'. Those approvals relate to onboarding new online merchants, while PayU continues to provide payment services to existing online merchants. PayU India's revenue grew 15% to $211M in the half, and India stayed at nearly half of PayU's core payments revenue after the loss-making card was shed.