My Mobile Payments to raise $100 mn to fuel growth plans

The company had received its first external investment of $29.7 mn early last year from Calpian Inc

Mumbai-based My Mobile Payments Limited (MMPL), which had launched its mobile payment platform Money On Mobile (MOM) three years ago, is planning to raise a series-B funding of between $75 million and $100 million to use in growth and expansion of operations.

The investments, characterised as a series-B funding, are sought in the second stage of early-stage funding. It may be recalled that the company had received its first external investment of $29.7 million early last year from Calpian Inc, a Texas-based public company that deals with electronic payments processing.

According to Shashank M Joshi, managing director of MMPL, the company so far grew its operations just by directly reaching out to retail outlets as they in-turn recharged mobile wallets of individual consumers in exchange for physical cash.

It is now planning to use other modes like advertising to grow the customer base, besides entering into new areas of mobile point of sale (PoS), a technology that turns a normal mobile phone into a credit card/ debit card swiping gadget in the hands of small shopkeepers. The company is planning to cover 5,000 retail outlets under the mobile PoS services.

The company’s mobile payment platform is currently generating about 400,000 transactions a day with the average value being around Rs 80 per transaction. At present, most of these transaction are coming  from customers using for topping up of prepaid mobile talktime and direct-to-home (DTH) recharges though the company offers about 36 services, including utility bill payments.

My Mobile plans to add 28 more services in the next 45 to 60 days. Currently, about 150,000 retail outlets and 200,000 individual customers are using the MOM mobile wallet platform.

Joshi said that the company was hoping to reach an average transaction size of 1.5 million a day by the end of this year. It had started with Rs 19 crore in total transaction value in the first year, followed by Rs 250 crore next year and Rs 650 crore in the year ended March 2013, showing a manifold increase in transaction value. The company expects a four-fold increase in transaction value at Rs 2,500 crore during the current financial year, according to him.

The company receives 0.5 per cent to 1 per cent commission on each transaction from the merchant or the utility concerned while 80 per cent of it has been paid to the MOM retailers as their commission, according to Joshi. Started with an initial capital of Rs 6.;5 crore of promoters’ money, the company is  hoping to break even in six months from now.

A number of other players like Airtel Money and Paypal are also offering similar mobile payment offerings. Joshi said the market potential was so huge to  grow in leaps and bounds across urban and rural areas as people get the taste of convenience in paying bills and other transactions even from a basic phone.