Update: Manish Patel, CEO of Mswipe told MediaNama that more than 30,000 merchants will be able to use Sodexo’s meal card. He added that this is the first phase and will be deployed to merchants electronically within the next month.

Earlier: Employee benefits services provider Sodexo has signed a partnership with point-of-sale (POS) provider Mswipe. Through the deal, Sodexo will be expanding its footprint and employees can use Sodexo’s Meal Card at some Mswipe merchants like grocery stores, restaurants, cafes and food delivery services.

Sodexo is accepted at 15,000 locations and is looking to expand to tier 3 and tier 4 towns and cities. Currently, Mswipe has 2,00,000 merchants on board across 500 cities in the country and says it is adding 15,000 new merchants month-on-month.

Note that Sodexo runs its own proprietary acceptance network and issues a separate POS terminal to merchants. It has also opted not to partner with card networks such as MasterCard and Visa for regulatory reasons and to make sure the Meal Card is only used to purchase food and non-alcoholic beverages. With the Mswipe partnership, Sodexo has integrated a software patch in the back end which separates transactions from the Meal Card and regular cards. The partnership will also have a revenue sharing agreement where Mswipe will earn a portion when a Meal Card is swiped at its merchants.

Sodexo charges a marketing fee to merchants. “The fee for the merchant varies from different categories. The volume of transactions from the merchant determines the fee we charge,” Suvodeep Das, Vice President for Marketing at Sodexo told MediaNama in an interview last month.

The employee benefits space has started heating up following the Reserve Bank of India’s draft guidelines which say that meal vouchers cannot be issued in paper form anymore and will have to move to digital means by the end of 2017.

Last month, Paytm had launched a Food Wallet where companies will be allowed to load food allowance to employees under the government’s approved tax redemption bracket.

Around the same time, Zeta, the Bhavin Turakhia-backed employee benefits service, partnered with card network RuPay to issue a pre-paid card called Zeta Super Card for employees.  With this, employees can pay with the pre-paid card at over 12 lakh RuPay-enabled POS terminals.