Suvidhaa Infoserve, a services commerce company, that offers payment services through retail outlets, has raised $12 million in its third funding round, from Japanese corporate conglomerate, Mitsui & Company. According to a statement from the company, the raised funding amount will be used to further enhance Suvidhaa’s technology platform, broaden its portfolio of consumer service offerings and to expand its market presence in neighborhood stores across India.

After closing this funding round, Suvidhaa has raised a total of $25 million which includes seed funding by billionaire Shapoor Pallonji Mistry. The company had raised $7 million in its second round of funding from IFC (World Bank Group), and existing investors, Norwest Venture Partners (NVP) and Reliance Venture Asset Management (RVAM). The two had earlier invested an undisclosed amount in the company.

Founded in 2007, the company allows users to make payments to IRCTC for railway ticketing, major airlines such as Jet Airways, Kingfisher, Air India, SpiceJet, GoAir and IndiGo for airline ticketing, telecom services purchases from Vodafone, Airtel, BSNL, Reliance, Idea, Aircel,Tata Docomo and MTNL, banks such as Union Bank of India, Corporation Bank, ICICI Bank, Indian Overseas Bank, YES Bank, and Karnataka Bank , financial services and insurance players such as, LIC, ICICI Prudential ,HDFC Life, Metlife, ING Vysya, Birla SunLife, bus ticketing from more than 400 bus operators, multiplexes such as Fun Cinema, and to others. It also supports bill payment for utility companies for electricity, gas, telephones and mobile bill payments.

Payments can be made through a network of 45,000 neighborhood stores or ‘Suvidhaa Points’ across 1700 cities and towns in 28 states. These stores are essentially kirana stores, mobile stores, medical Stores, STD Booths, cyber cafes, travel agents, insurance agents and many other categories of neighborhood stores, equipped with Suvidhaa’s payment terminals. Suvidhaa claims that its service can handle over 42,000 terminals at a time and up to 25 transactions per second.

The Indian market is still at a nascent stage in terms of online payments, with a low internet and credit card penetration. With online services the need for government infrastructure to cater to every day services like ticketing has reduced. But to take this benefit to the masses, a hybrid model is close to an ideal solution. A lot of connected Indians are also skeptical of making online payments for reason of security. So the ability to pay in cash, physically for electronic services will allow e-commerce to reach out to the masses, specially in tier-3 cities and towns.

However, with a large network there are always issues surrounding quality of service and handling customer complaints. Also we don’t know if Suvidhaa has deployed non-PC mobile based terminals. Suvidhaa more or less aggregates services and does not offer a payment gateway unlike its competitors ITZ Cash and Oxigen, which also offer payment products.

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