PayU reports 20% revenue growth to $397m in H1

PayU India saw its revenue rise 20% year-on-year to US$397 million for the six months ended September 2025, according to a filing from its parent company Prosus.

PayU, a fintech firm owned by Netherlands-based Prosus, reported that its payments division contributed US$301 million in revenue, also up 20% from the previous year.

Value-added services such as fraud detection, multi-factor authentication, and software as a service (SaaS) solutions now make up 34% of payments revenue.

Payment volumes increased 55%, led by smaller-ticket Unified Payments Interface (UPI) transactions.

The company said that stable take rates were maintained, helped by a focus on mid-market and small and medium businesses.

🔗 Source: The Economic Times

🧠 Food for thought

Implications, context, and why it matters.

UPI’s free model under strain as subsidies fall

The government cut funding for RuPay and BHIM-UPI incentives from Rs 2,485 crore in FY24 to Rs 437 crore by FY26, an 82% drop 1. Banks earlier got Rs 0.25 per Rs 100 UPI transaction, now only Rs 0.15 2.
PayU kept take rates steady even as UPI volumes grew by focusing on mid-market firms and Small and Medium Businesses (SMBs).
Reserve Bank of India (RBI) governor Sanjay Malhotra said UPI transactions carry costs that someone must cover 2. He also said he never claimed UPI cannot stay free forever 2. ICICI Bank, a major Indian private sector bank, will charge payment aggregators 2 to 4 basis points per transaction from August 2025 3.

Reconciliation gaps open as SMBs juggle multi-gateway flows plus GST rules

Many clients drive 34% of PayU revenue from value-added services. Firms need tools to track Retrieval Reference Number (RRN), National Payments Corporation of India (NPCI) Transaction ID, Virtual Payment Address (VPA). These tools must work across UPI plus National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS). Manual reconciliation of these payments is highly inefficient 4.
GST on merchant discount rates adds complexity. Cross-state flows raise the bar further. Late settlements across Razorpay, Cashfree, PayU make it worse. Strong systems can automate 95% of UPI accounting entries 4.
Software as a Service (SaaS) vendors plus investors can tackle the gap between TallyPrime’s native tools 5 and what larger firms need. Teams want multi-gateway reconciliation, automated UPI matching, real-time GST compliance 4.