Spice Money: Industry Monitoring 29 May 2019
- Priyanka Kanodia
- Jun 10, 2019
- 6 min read
Spice Money
Industry News
Payments tech firm FSS expands in EU, to invest in US
Publication- Business Standard
Edition- Online
Date- 29 May, 2019
Targeting 50 per cent of its turnover from overseas operations, payments technology and transaction processing major Financial Software and Systems (FSS) is expanding its European operations by venturing into Netherlands, a top company official said. FSS Managing Director (MD) Nagaraj Mylandla told IANS here that the company is also planning to set up a transaction processing centre in the US. "In the last fiscal our revenue was Rs 1,100 crore with a split of 80 per cent domestic and 20 per cent overseas. In the next two years we expect the domestic: overseas ratio to be 60:40," he said. According to Mylandla, FSS is looking at two strategies for the US market - either buy into an existing transaction processing player or set up its own infrastructure ground up. "Talks are on and nothing has been finalised. The investment outlay will be about $20 million," he said. The FSS has set up its own processing centre in Dubai a month ago at an outlay of $5 million and a similar amount will be invested there soon, he added.
According to executives, the company is replicating its India business model in the overseas markets. "The FSS has two revenue streams. The first one is from managing and running the automatic teller machines (ATM) for several banks in India. The second revenue stream is the retail software business wherein we sell people process and the software at customer side," FSS Global Business Head Ram Chari told IANS. Queried about the expansion in Europe, Chari said: "We are trying to push our software and solutions capability with a two pronged approach - one, work with large tier-1 banks and processors to help them modernise legacy technology. Two, partner with new age fintech companies and payment processors who are entering the market to offer financial products."
Please click on the link below:
Govt sets annual target for digital transactions at 40 billion
Publication- Business Today
Edition- Online
Date- 29 May, 2019
Despite missing its target for digital payments for two consecutive years, the government has optimistically set a target of 40 billion e-transactions for FY20. That's a jump of 33 per cent over last year's target of 30 billion, which was reportedly missed by about 4 billion. To ensure that the latest target is met, the Ministry of Electronics and Information Technology (MeitY) has assigned fixed goalposts for the various players in the business. While SBI has been given a target of 7.7 billion transactions, Paytm has to deliver 5 billion digital transactions through its payments bank and popular mobile wallet, sources in the know told The Times of India. They added that private banks HDFC Bank and ICICI Bank are expected to chip in with about 2.5 billion and 2.8 billion transactions, respectively.
As the country readies for the Modi 2.0 government to take charge, speculation is rife that all of NDA's pet schemes and initiatives will see renewed focus, including Narendra Modi's dream of a cashless India. "Once the swearing-in of new ministers takes place, things will further accelerate," said a source. While banks will be the biggest catayst for spurring on digital payments - which is why they have reportedly been asked to deploy 8.5-million point of sales (PoS) terminals in the rural areas and the northeastern states alone - mobile wallets and the Unified Payment Interface (UPI) will also play a key role.
Please click on the link below:
Viewpoint | The onerous task of making payments to non-residents
Publication- Money Control
Edition- Online
Date- 29 May, 2019
Generally, when an individual makes any payment to a resident of India, he is not required to deduct tax at source. Exception to this are payment towards purchase of immovable property, payment of rent exceeding the specified amount and payments that are part of business expenditure of the payer who was liable to tax audit. When payment to a resident is towards the purchase of immovable property or towards rent, the process of deduction of tax and its payment to the government is comparatively simple. The payer only requires his Permanent Account Number (PAN) and PAN of the recipient.
However, when payments are to be made to a non-resident person, the rules are onerous and the procedure quite elaborate. Even if a small amount is being paid, the payer is required to deduct tax at source if the amount is taxable in the hands of the non-resident. There is no threshold. At the outset, while making the payment to a non-resident one has to see if the amount that is being paid is in the nature of income. If it is in the nature of income or there is an element of income in that payment, one needs to verify whether it is chargeable to tax in the hands of the non-resident in India. If the amount is income and is chargeable to tax, then tax is required to be deducted and necessary forms and returns have to be filed.
Please click on the link below:
Mphasis teams up with blockchain startup on automated financial services platform
Publication- CNBC TV 18
Edition- Online
Date- 29 May, 2019
Mphasis Ltd, an Indian technology firm majority-owned by Blackstone Group LP, has teamed up with blockchain startup Bitfury to create either a digital token or a platform aimed at automating financial services such as payments in international trade transactions between countries, an Mphasis executive said. Financial terms of the partnership were not disclosed. Andres Ricaurte, senior vice president and global head of payments for Mphasis, told Reuters in a recent interview that both companies will seek to facilitate instant settlement of export and import transactions, reduce reliance on complex foreign exchange systems, and increase flexibility in liquidity management for financial institutions. While there are projects trying to digitize other areas of international trade transactions such as document management and customer due diligence, the core financial services such as cross-border settlements and financing of transactions operate on "outdated and clunky" infrastructure, Ricaurte said.
The result is a complex gridlock that limits visibility for all parties and hinders access to liquidity for those who need it most. Those conditions have contributed to a global $1.5 trillion gap between the demand and supply of trade finance, Ricaurte said. The collaboration with Bitfury will try to address this key weakness in the sector. Bitfury, which has a valuation of about $1 billion, is one of the largest companies that develops blockchain solutions for various clients and governments. It raised $80 million recently from investors including the merchant bank founded by billionaire Mike Novogratz, a former macro hedge fund manager at Fortress Investment Group.
Please click on the link below:
Google Pay continues lead over Paytm and PhonePe in UPI transaction value
Publication- EN Trackr
Edition- Online
Date- 29 May, 2019
Google’s UPI-based payment app Google Pay has witnessed a remarkable growth ever since its launch in 2017 in India. In about 20 months, it has achieved a stellar growth giving its main rivals PhonePe and Paytm a run for their money. According to transaction data of April, Google Pay did transactions worth Rs 49,700 crore way more than its competitors PhonePe and Paytm. PhonePe was at second number with a transaction value of Rs 42,610 crore whereas Paytm registered transactions worth Rs 35,500 crore. All three together accounted for about 90% of the Rs 1.42 lakh crore worth transactions reported last month. Govt-backed BHIM accounted for merely 15 million transactions worth Rs 6,600 crore during the same period.
This is almost 14% rise in Google Pay transactions in comparison to transactions value in March, as per Bloomberg report. Interestingly, Google Pay recorded UPI transactions worth Rs 43,000-Rs 45,000 crore in March. Both PhonePe and Paytm are said to have done transactions worth Rs 31,000-32,000 crore each. However, in terms of volume of transaction, PhonePe leads with 258 million transactions. Google Pay and Paytm are estimated to do transaction between 230 million to 240 million. As per the last figure provided by Google Pay in March, it has about the user base of 45 million. PhonePe and Paytm have not revealed their exact user base. Earlier, in a tweet, Paytm founder Vijay Shekhar Sharma said there are about 94 million KYC wallets and 371 million total users on its platform.
Please click on the link below:
Comments