Update: Blackstone has formally announced that it has invested Rs 150 crore ($33 million) in FINO for a significant minority stake. FINO inteds to utilize the funding towards the overall growth of the company and to meet long term capital requirements

(by Saptarishi Datta and Nikhil Pahwa)

Earlier: Private equity fund Blackstone is set to pick up around 20% equity in FINO for around Rs 140 crore, reports The Times Of India; no source is mentioned for this information, but there does appear to be renewed interest in payment aggregation related services after a lull for a couple of years:

– Earlier this year, Uttar Pradesh Forest Corporation (UPFC) had tied up with FINO to launch a Smart Card  based collection and payment disbursal system for the tendu leaf collectors of Lalitpur, Uttar Pradesh.
– Paymate is powering IFMR Rural Finance’s services, as well as the Interbank Mobile Payment Services for Syndicate Bank, Lakshmi Vilas Bank and South India Bank. Note that Paymate also has a prepaid card license from the Reserve Bank of India.
– Eko, late last year, announced a round of fund raising from 4B Capital. It powers mobile banking solutions for State Bank of India as a banking correspondent.

FINO facilitates no-frill bank accounts, universal health insurance and delivers government pension, and besides being a technology enabler, it also manages cash on the field, and claims a network of 12,000 agents, 24 million customers, and 3 million transactions in a month, across 23 Indian states and 293 districts. It offers savings bank accounts, loan products, recurring deposits, remittances, insurance products, government disbursements and others. It has alliances with Axis Bank, Corporation Bank, HDFC Bank, ICICI Bank, ING Vyasa Bank, OBC, PNB, SBI and Union Bank of India.

While the technology solutions will allow services to scale, there is no clarity on exactly how many transactions are taking place, and how much money is being transacted. We have some infomation on mobile banking at MediaNama Charts on:

Mobile Banking transactions
Prepaid card transactions

Our Take

It’s also worth noticing that there has been a change in the way technology companies have been forced to operate in India: none of them are really in a position to own the customer: RBI regulations have ensured that the mandate of owning the customer is that of either the banks, or prepaid card licensees. Companies that were once trying to woo users to sign up are now banking correspondents, or technology solutions providers. Paymate appears to be one that has managed to change with the times. What about the others?