Idea Mobile Commerce Services, the mobile banking subsidiary of the telco Idea Cellular has received a five-year prepaid mobile wallet license from the Reserve Bank of India (RBI), enabling them to offer mobile payment services to its subscribers.
With this, Idea Cellular becomes the third telco to receive a prepaid payments license in India after Bharti Airtel and Vodafone. Last month, Idea Cellular MD Himanshu Kampania had disclosed during its earnings call, that they had applied for a semi-closed prepaid payments license and were currently awaiting its approval.
This license will enable them to create stored-value cards (physical or digital), which can then be used to purchase products from multiple vendors. However, the withdrawal of money once added is not allowed, for which telecom operators need a banking partner and Idea Cellular currently has a partnership with Axis Bank to offer mobile money transfer services in four circles.
During the earnings call last month, Kampania had pointed towards opportunities in machine-to-machine (M2M) services, Mobile Banking and mobile money transfer as growth areas for the company. “There is potential for new applications, and there are a lot of growth opportunities in newer applications like M2M services, mobile banking, money transfer and the company is geared”. More on that here.
Airtel currently operates Airtel Money through its subsidiary Airtel M Commerce Services Ltd and the service is live in 27 Indian states. In October 2013, the telco had claimed that total transactions value of Airtel Money had increased by 10-fold to to Rs 654 crore for the quarter ended September 30, 2013, up from Rs 69 crore in same quarter last year while the subscriber base had increased 168.5% year on year to 1.4 million subscribers.
Prizm Payments: Besides this, RBI has also extended the license period of Prizm Payments by five years, for installation and operation of white label ATMs. Last week, Japanese electronics conglomerate Hitachi had entered into a share transfer agreement with all the shareholders of Prizm Payments and the transaction is expected to be completed by the end of February 2014.
Last month, Reliance Industries’ payment solutions subsidiary Reliance Payment Solutions Ltd had also received prepaid mobile wallet license for a service dubbed as ‘Jio Money’, while One97 Communications (Paytm) and MobiKwik had received prepaid wallet licenses in August 2013. Beam Money had surrendered its prepaid wallet license in July 2013.
Flipkart Prepaid Wallet? E-commerce major Flipkart had also applied for a prepaid wallet license for its PayZippy prepaid card service, but it has not been able to get a license yet. This was necessitated by Flipkart’s shift from a direct to consumer e-commerce business to a marketplace model, following which vendors became “sellers” and Flipkart could not allow third party payments without a semi closed prepaid wallet system, as per the RBI regulations.