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LazyPay stops BNPL payment product after RBI’s directive on PPI

“We miss you too! LazyPlus UPI will be back soon,” LazyPay said in a consumer communication. The company had already stopped taking new users last year as banking partners pulled out of the credit arrangement. Meanwhile, the RBI, on June 20, barred non-bank wallets and pre-paid cards from loading their credit lines into these platforms.

ET Now Digital

Updated Jul 5, 2022, 21:14 IST

LazyPay BNPL payment product temporarily halted over RBI’s directive on PPI

New Delhi: Days after the Reserve Bank of India stated that non-bank institutions cannot load credit lines into these instruments, PayU’s lending arm LazyPay has stopped its buy-now-pay-later (BNPL) payment product LazyPlus UPI temporarily.

The move comes amid rising regulatory concerns for card-based credit fintech firms. LazyPay launched the BNPL product in September 2020, which enabled users to pay through the UPI channel from a revolving credit line issued to the customer. The company was giving a credit line of up to Rs 1 lakh to users for their online and offline transactions conducted via UPI.

“We miss you too! LazyPlus UPI will be back soon,” LazyPay said in a consumer communication, reviewed by Economic Times. The company had already stopped taking new users last year as banking partners pulled out of the credit arrangement.

LazyPay’s stopping of its BNPL product comes almost a fortnight after the central bank sent a directive to industry stakeholders disallowing prepaid payment instruments (PPIs) from being loaded with credit lines.

After the RBI’s directive, LazyPay had updated its terms and conditions, wherein it asked users to accept new terms and conditions, failing which their transactions will be blocked across the platform.

Apart from this, LazyPay is also aiming at changing its ‘LazyCard’ offering from a prepaid card to a credit card, and reissue them to the users to comply with the RBI’s directives. For the same, it is in talks with State Bank of Mauritius (SBM) Bank India.

The RBI, on June 20, barred non-bank wallets and pre-paid cards from loading their credit lines into these platforms. The bank, in a one-page circular to non-bank pre-paid payment instruments (PPIs), instructed them to stop such practice immediately or face penal action.

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