Spice Money: Industry Monitoring 09 January 2019
- Priyanka Kanodia
- Jan 9, 2019
- 4 min read
Spice Money
EbixCash acquires Essel Forex for approximate USD 8 million
Publication- Travel Biz Monitor
Edition- Online
Continuing its aggressive acquisition spree Ebix, Inc. has acquired Essel Forex Limited through its India subsidiary its EbixCash World Money Limited. It has entered into an agreement to acquire 100% assets of India based Essel Forex Limited, for approximately $8 million. Ebix will be funding the entire transaction in cash, using its internal cash reserves. Essel Forex will be tightly integrated into the EbixCash Financial Exchange offering in India and abroad. The retained Essel Forex executives will become an integral part of the combined EbixCash remittance and forex leadership team headed by TC Guru Prasad, MD, EbixCash World Money. Ebix believes the Essel Forex business can generate operating margins of 40% or more, once fully integrated. Ebix expects the acquisition to be immediately accretive to its earnings.
Robin Raina, Chairman, President and CEO, Ebix said, “Essel Forex has a rich focus on the corporate clientele with strong partnerships with many leading banks. Their geographical, product and client overlap with EbixCash made the synergies rather compelling. We remain committed to establishing the Indian sub-continent’s largest financial exchange and this is another step in that direction.”
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Industry News
Amazon starts closed user group testing of UPI pay platform
Publication- ET Tech
Edition- Online
Amazon’s efforts to issue its own Unified Payments Interface (UPI) handles in India has entered the closed user group stage, where the company is testing the payments product within a restricted user base, according to two bankers. The American e-commerce firm is working with private sector lender Axis Bank on the product, they said. ET had reported on August 6, 2018 that Amazon’s plans to enter UPI payments had hit the data localisation hurdle, since the Reserve Bank of India had stipulated that payments data should be stored in India only. UPI plans of another American technology company, WhatsApp, are understood to have got stuck because of this hurdle. While Amazon already accepts UPI payments, it cannot issue its own handles. But if its plans go through, it can start issuing its own handles as well. It would join the list of other prepaid payment instruments or PPI licence holders such as Freecharge and Mobikwik which have jumped onto the UPI bandwagon over the past one year.
Mobikwik is offering UPI payments in partnership with HDFC Bank through the ‘ikwik’ handle and Freecharge is issuing UPI handles through Axis Bank. Amazon would have to undergo an audit of where it is storing all the payments data before it can go live with the product, a senior banker told ET on condition of anonymity. As of now, the company is just testing the payments instrument. “We are committed to the long-term vision of a less-cash India and continue to invest in experiences which reduce customer friction, improve affordability and foster everyday habits, thereby building preference for digital payments,” an Amazon spokesperson said in response to a query emailed by ET. Axis Bank did not respond to ET’s queries.
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RBI forms Nandan Nilekani-led digital payments panel
Publication- Livemint
Edition- Online
The Reserve Bank of India (RBI) on Tuesday constituted a high-level committee headed by former chairman of the Unique Identification Authority of India (UIDAI) Nandan Nilekani to set up a robust digital payments ecosystem in the country. The committee has been asked to review the existing status of digitization of payments, identify gaps in the ecosystem and suggest ways to plug them. According to its terms of reference, the panel has to suggest a medium-term strategy for deepening digital payments, and measures to strengthen safety and security. “The committee shall submit its report within a period of 90 days from the date of its first meeting,” the RBI said.
“Looking forward to working with the @RBI and the committee to re-imagine payments for India and Indians!,” tweeted Nandan Nilekani hours after RBI’s announcement. Besides Aadhaar architect Nilekani, the other members of the panel are former RBI deputy governor H.R. Khan, former managing director and chief executive officer (CEO) of Vijaya Bank Kishore Sansi, former secretary in the ministry of IT Aruna Sharma and chief innovation officer at the Center for Innovation, Incubation and Entrepreneurship, IIM Ahmedabad, Sanjay Jain. The terms of reference also include: “To undertake cross country analyses with a view to identify best practices that can be adopted in our country to accelerate digitization of the economy and financial inclusion through greater use of digital payments.”The panel has also been tasked with the responsibility of increasing customer confidence and trust while they access financial services through digital modes.
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RBI Encourages ‘Tokenisation’ For More Secure Card Payments
Publication- Bloomberg Quint
Edition- Online
The Reserve Bank of India has permitted card payment companies to offer their customers a ‘tokenised’ service to facilitate card transactions in a secured manner. Once implemented, customers will be able to create a unique alternative code or ‘token’ that will mask their actual card details to conduct financial transactions. While ‘tokenisation’ was already permitted in some cases, the regulators latest circular attempts to broaden its use in the interest of making digital payments more secure.
Card payment companies will be able to contract third party application developers to provide the ‘tokenisation’ services, through mobile phones or tablets (only on these devices for now) to customers. But all parties involved in the “payment transaction chain” will have to be registered with the central bank.
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