Prosus launches crypto payments for PayU users
Naspers-owned company invests in Celo, a platform that makes financial apps and crypto payments accessible through mobile phones
Prosus has taken another swing at blockchain technology, by investing in a crypto platform to beef up its fintech business. The investment will enable it to offer users the ability to make payments with digital currency.
On Thursday, the group — through its payments and fintech business, PayU — said it had backed Celo, a mobile-first open-source blockchain ecosystem and platform that makes financial apps and crypto payments accessible through mobile phones.
PayU did not say how much they put into the firm.
Blockchain, which underpins cryptocurrencies such as bitcoin, is a system of recording information that makes it difficult or impossible to change, hack or cheat. It is essentially a digital ledger of transactions that is duplicated and distributed across a network of computers.
As part of the deal PayU will offer cryptocurrency based payment option for merchants using its platform.
PayU is one of the world’s largest online payment service providers, operating in more than 50 markets, with more than 450,000 merchants and customers across Latin America, Africa, Europe and Asia.
PayU says it has partnered with payment infrastructure company First DAG and Celo’s Alliance For Prosperity to offer stablecoin payments. Through this integration, about half-a-million of PayU’s merchants will be able to accept Celo’s stablecoin, cUSD.
Unlike bitcoin, stablecoins are cryptocurrencies that attempt to peg their value to a currency such as the US dollar or commodities such as gold.
PayU said this move “will open the doors for millions of people in emerging markets who are underserved by traditional financial institutions to easily pay for groceries, subscription services, and retail goods at participating merchants.”
As an emerging market specialist, the company says stablecoins are “particularly well-suited for high-growth markets” because they provide access to US dollar and euro-backed digital assets “that are protected from the volatility of some fiat currencies and of cryptocurrencies more broadly.”
As a group, Prosus and its parent Naspers, are primarily invested in classified, fintech, food delivery and education, with recent forays into health and groceries.
The financing is a likely nod that the group sees viable opportunity in the crypto space.
Earlier this year, Prosus CFO Basil Sgourdos had told Business Day, that they were “not going to allocate meaningful capital right now to cryptocurrencies”, choosing to rather invest in areas where they “see a clear path to a good return on a sustained basis”.
For now, it seems the stability offered by stablecoins may have enticed the technology investor to make this move.
Naspers is no stranger to the cryptocurrency sector. For a number of years, the group backed SA-born Luno, which has grown to become the country’s largest cryptocurrency exchange, competing with firms such as VALR and AltCoinTrader.
Last year, Digital Currency Group, a US-based blockchain investor, bought Luno from a group of investors that included Naspers and Rand Merchant Investment Holdings.
PayU had actually been one of the initial members of an association for Facebook’s proposed blockchain-based digital currency premised as a stablecoin, Diem, first announced two years ago, pointing to the company having had its eye on stablecoins for some time.
In a statement, Mario Shiliashki, CEO of PayU’s global payments organisation said: “We strive to equip merchants and their customers with the latest payments solutions and this drive has led us to invest in Celo and purchase tokens, in addition to integrating the stablecoin offering for our clients and partners.
He said as digital transactions become the norm, “it is important that we equip merchants and customers with the latest payments solutions”, adding “this creates new opportunities for e-commerce merchants and creators, and will open new doors for users to transact freely”.
Update: July 29 2021
A previous version of this article said PayU had acquired Celo. However, the company has in fact invested in and not purchased Celo.
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