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Dubai company set to buy BCCL's TimesofMoney

Sources say Rs 850-1,000-cr deal likely in a fortnight for the business of digital payment solutions to NRIs

Arijit Barman & Niladri Bhattacharya  |  Mumbai 

Bennett, Coleman and Co Ltd (BCCL), India’s largest media house and popularly known as the Times group, is again divesting its non-core businesses. Dubai based Network International LCC, one of the largest of payment solutions providers, was set to buy TimesofMoney, the digital payment services provider and remittance company of BCCL, said two people aware of the development.

According to them, this was part of a larger group restructuring, ahead of its proposed Initial Public Offer. BCCL had got investment bank UBS to advise it on finding a strategic buyer for the business. The talks have been on for a while and the formal announcement is due within the next fortnight.

The sources added the business was currently valued at around Rs 700 crore and BCCL was exiting at a premium of close to Rs 800-1,000 crore.

When asked, Ravi Dhariwal, CEO of BCCL, told Business Standard, “I have no comments to offer on this market speculation.” Despite several mails and phone calls, Ram Chari, CEO, Network International, did not respond to Business Standard’s queries.

Over the years, the Times group has divested many non-core businesses, making neat profits. In 2000, HDFC Bank took over Times Bank from BCCL. It also sold its music retail chain, Planet M, to Videocon for around Rs 300 crore.

With over a decade of experience, TimesofMoney is a wholly owned subsidiary of BCCL, offering digital payment solutions to non-resident Indians (NRIs). Its services includes domestic and global money transfers, e-payments and co-branded cards. It was incorporated as a joint venture between Citi Ventures and BCCL. Industry analysts say Timesof Money had been a pioneer in many of its service offerings. For example, in 2006, it had launched an online wallet service called Wallet 365, eventually stopped by the Reserve Bank of India (RBI).

Founded in 1994, Network International provides credit and debit card processing, ATM sharing, and ATM management services for banks, retail industry, online merchants, and financial institutions in West Asia and North Africa (Wana). It is the UAE's largest payment acquirer and the largest third-party processing vendor, offering complete EMV-certified solutions as institutions migrate to EMV Smart Card technology.

The company also provides credit and debit card processing services, ATM sharing and ATM management services to 42 banks in the Gulf region and manages a network of a little over 700 ATMs. As a merchant acquirer, it enjoys 65 per cent market share through its EFTPOS terminals. It is the first independent vendor certified by both Visa & MasterCard for card payments in Wana.

The business
Remittances are becoming a key area of interest for both the Earlier this year, Bank of India had tied up with TimesofMoney to offer remittance solutions to NRIs in the UK. India is the highest remittance receiving country in the world, estimated at $58 billion yearly. TimesofMoney's proprietary platform, 'Remittance in a Box', provides banks with a plug-and-play solution to power their online remittance service. This platform offers user interface & design, risk management, technology, operations and customer service.

According to a World Bank report, India got $63.7 bn from nationals working abroad in 2011, marginally higher than even China, which received $62.5 bn in remittances. The bank has projected that despite a slowdown in global growth in 2012, remittances are expected to pick up further.

Online and mobile applications for money transfers is becoming a booming business opportunity and TimesofMoney has plans to cater to that fast growing segment by reviving earlier plans. It offers Remit2India and Remit2Home, both money remittance services. While the former is an India-based service, the latter is global. However, it does not offer money transfer in the domestic market. At the moment, domestic remittance services are mostly offered through banking correspondent tie-ups, since RBI has enforced strict guidelines and requires KYC (know-your-customer) documentation. Although the central bank had proposed relaxations in the guidelines, and had removed the Rs 50,000 cap on mobile transfers, mobile money hasn’t really picked up in India.

According to Uttam Nayak, group country manager — India and South Asia at Visa, there is tremendous opportunity to build in efficiencies and transparency within the Indian remittance market by electronifying the processing systems, by lowering costs and introducing near real time money transfers. “Apart from the cross-border (where money is sent in from outside the country) remittance market where India is the largest, the domestic remittance market, too, is huge. In fact, it can be as large as 20-30 times of the cross-border remittance market; hence, there is huge scope to build in efficiencies. With more electronic processing systems and solutions coming in, it makes the transfer of money more secure, efficient and faster. We in Visa are focusing on facilitating real-time fund transfer to further help customers.”

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First Published: Thu, May 31 2012. 00:57 IST