South African Naspers to acquire Indian payment gateway Citrus Pay; mobile payment market to grow at a CAGR of over 50% during 2016-2020

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Media and internet service provider Naspers is set to acquire Citrus Pay through an all cash transaction deal ranging between USD 150 to 180 million. Currently, Naspers operates in India through PayU operated under Ibibo group and this acquisition will lead to significant market share gain by the company. This deal will mark the removal of prominent shareholders such as Sequoia Capital, Ascent Capital and Japan based strategic investors Beenos and econtext Asia from CitrusPay. Sequoia Capital currently has 30% share in the payment gateway and will receive profitable ROI of 10 to 12% through this acquisition. As part of the deal, the management and workforce of Citrus Pay will be absorbed by PayU. Naspers plans to invest USD 30 to 40 million after acquisition.

Naspers has been expanding to emerging markets through PayUover the past few years. It currently operates in 16 other emerging market beside India. Prior to this acquisition, it invested around USD 250 million in Ibibo group, increasing its stake to 90% in the venture. Through these initiatives, Naspers is predicted to strengthen its foothold in India. The country has showcased significant growth potential in e-commerce, travel and bill payment segment. This is also evident from strategies adopted by leading online marketplace companies such as Snapdeal and Flipkart. While Snapdeal acquired mobile wallet Freecharge for USD 400 million in 2015, Flipkart acquired PhonePe in 2016 and plans to invest USD 100 million in it.

Citrus Pay had recently touched the benchmark of processing USD 3 billion through e-commerce payments. Payment gateways generate 1 to 2% of their gross revenue through bill processing. Other players in the segment include BillDesk and CC avenues. It has been predicted that digital payments segment of India is likely to grow at a CAGR of over 50% during 2016-2020.

To know more and gain deeper understanding of mobile payment industry in India, click here.