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As the Reserve Bank of India (RBI) announced the application for payment banking licence, Tech Mahindra was among the list of companies that applied for the same. Tech Mahindra along with Mahindra Finance Services have applied for the licence.
Jagdish Mitra, head mobile business and large deals, Tech Mahindra believes that the payment banking licence is a logical extension to its plans in the payment industry, one of the growth sector identified by the company.
"We already have a prepaid payment instrument (PPI) that was issued in 2013 by the RBI. We have already conducted a few pilots and were conducting mandatory security checks before we roll out. This year we will start its roll-out in India," said Mitra.
Mitra also adds that between Tech Mahindra and Mahindra Finance Services, it was the former which was found to be well entrenched to address the features under payment banking licences. "We seemed to have already covered the payment bank journey. Besides the idea behind this is to target the unbanked population which is primarily in the rural area and setting up of banking infrastructure is not feasible. We are one of the largest mobile payment platforms globally," he added.
Tech Mahindra is already in the mobile payment segment with two of its platform, MoboMoney, for which it has acquired RBI licence till 2018. This platform was developed by CanvasM. The whole payment play of the company also comes from its acquisition of Comviva from Bharti Group in 2006
The other product that the company has in mobile payment segment is Mobiquity platform. This connects banks, billers, merchants, payment gateways and merchant websites, to deliver a range of financial services on mobile. The platform has so far had 60 deployment and serves over 500 million users. According to the company's website in Africa the Mobiquity platform addresses over 130 million customers of 12 per cent. Globally the platform has over 250 million subscribers.
"With Mobomoney we have already done pilots with small retailers and the response has been good in terms of ease of use. We have also used this platform for a financial inclusion pilot we did in Orissa. This was a natural extension for us," he added. Tech Mahindra is the first company in India to use near-field communication technology for this product.
But more importantly, the entry into the payment banking system in India will be an additional revenue stream for the company. "This fits in our company's strategy of Connected World, Connected Solutions. Besides, non-linear growth will come from digital platforms. Moreover if I am able to make this work in India I can easily replicate and take it into other emerging markets," said Mitra. If the company gets the licence, the payment company will be a separate entity reporting into Tech Mahindra.
Mitra also feels that other than the global exposure it has in payment, it's the Mahindra brand's popularity that will help it in getting volumes in this market. "Mahindra's rural penetration due to the nonbanking finance product is huge. We bring three things to a customer, Tech Mahindra's tested and tried platform in payment segment, With Mahindra Finance Services we bring in the required expertise in the banking domain and Mahindra brand," he added.
