ICICI bank will buy a 9.91% stake in a Mumbai based fintech start-up called ePayLater, the lender said in a stock exchange filing. The transaction, expected to be completed by the end of July, amounts to Rs 8.72 crore, the lender said. The development was first reported by VCCircle.

Founded in 2015 and operated by Arthashastra Fintech Ltd, ePaylater allows its customers a checkout credit option on online portals, similar to services like LazyPay and Simpl. According to its website, the company uses an algorithm to assign a credit limit to customers, based on their credit history and buying patterns on e-commerce platforms, digital footprint and device information. Customers get 14 days to make the payment, during which they can make additional transactions as well. However, failure to make a payment within 14 days will entail levying of a penal interest at the rate of 3% per month for the days that the amount stays overdue on a pro-rata basis, the company said on its website.

The firm also offers customers to make payments via UPI through ‘ePayLater UPI’, to selected partner merchants. The company charges a commission per transaction from the merchant. According to the filing on the stock exchange, ePaylater generated a revenue of Rs 32 lakh for 2016–17 and incurred a net loss of  Rs 1.75 crore, VCCircle reports. The startup previously raised $2 million (Rs 13.3 crore) in seed funding from three High Net worth Individuals (HNI).

ICICI Bank’s push into the Fintech world

In an interview with VCCircle, B. Madhivanan, chief technology and digital officer at ICICI Bank, said that the lender has earmarked Rs 100 crore for investments in fintech startups. Madhivanan also said that investments of Rs 40 crore (excluding the one in ePaylater) were already made at the time. Earlier this year, ICICI Bank announced that it will buy a 9.9% stake in Tapits, a Mumbai-headquartered mobile payments startup, reports the VCCircle. Further, the report also mentions that the lender has previously invested in Fingpay and Arteria.

This apart, the bank also launched numerous lending/credit service over the last year. ICICI offered a similar “pay later” option on e-commerce websites last year. The feature enabled customers who have not availed any loan in the past for amounts up to Rs 20,000 to pay later and required them to pay back the loan amount within 30 days following which, they will be charged interest similar to credit card rates. Last year, the lender also partnered with Paytm to offer short-term credit to select users.