PayMate Powers PayBill Mobile Payments Services In Nepal; Why Not Direct?

Paymate, the Mayfield Fund, KPCB and Sherpalo ventures funded mobile payments company has announced the launch of its mobile payment services in Nepal through a local representative PayBill. Paymate appears to be providing the technology solution to PayBill, to enable consumers to pay for mobile recharge, pay utility bills, buy tickets, P2P money transfer, etc. PayBill has partnered with Nepals largest private bank Everest Bank and Nepal Telecom, the countrys largest telco.

Three months ago, when Paymate had announced plans to launch in Nepal, there was no mention of PayBill. According to Manish Kumar Subba, Founder and CEO of PayBill Pvt. Ltd, the project has been in the works for over 14 months.

Outside of India, Paymate has a presence in Sri Lanka, where it has a tie-up with Bank of Ceylon. Ajay Adiseshann, MD of Paymate had told Mint in September that the company expects overseas to contribute 12-15 percent of revenues by March. Their tie-up in Sri Lanka is a 50-50 JV, focused primarily on remittances.

State run Nepal Telecom has 2.2 million subscribers, and operates both GSM and CDMA services. PayBills services, like Paymates in India, are SMS based, though the PIN authentication for Giftmate (which I’ve used) is IVRS based. I do think there’s an issue with the number of PINs one needs to remember now - a separate PIN for the ATM, for Internet Banking and mobile banking. If the account is the same, shouldn’t the PIN be independent of the mode of access?

Update: Probir Roy, Founder of Paymate told MediaNama that Paybill brings to them the local relationships and infrastructure - Paybill is a bill payment gateway, much like Billdesk in India. Paymate hasn’t set up their own infrastructure in Nepal, and the service is being launched as PayBill, powered by Paymate.

Note: Do take a look at our list of Digital Payment companies in India, covering mobile payment, cash card companies, payment gateways etc. It’s still a work in progress, so in case we’ve missed any, leave a message, or write to nikhil@ medianama .com.

Mukta Arts Acquires 51% Stake In Coruscant Tec; Option To Buy 49% More

Mukta Arts, a BSE listed Media and Entertaiment co founded by filmmaker Subhash Ghai has picked up a 51 percent stake in Coruscant Tec, a mobile VAS co founded by Ajay Adiseshann and Probir Roy in 2003. The two Coruscant promoters have also founded mobile payment company Paymate, which has received funding from KPCB and Sherpalo Ventures. According to the BSE filing by Mukta Arts,

The Company (Coruscant) is undercapitalized and was seeking investors who could create and aggregate content which is the key to this business. For Mukta Arts which has access to short content created by Whilstling Woods students and Audio and Film content, Coruscant was a good platform. Mukta has the option of acquiring the balance 49%.

It’s an all cash deal, and there are targets that Coruscant will have to meet, Probir Roy, co-founder of Coruscant told MediaNama. “It is in our interest to grow the customer base and the revenues”. Coruscant currently has only India specific licenses, but their mandate will now be to leverage Mukta Arts content, particularly in international markets, where “prices are more favourable.” Roy declined to detail any international expansion plans. Coruscant has around 13-14 agreements in place. They’ve provided Java based games to Indiatimes, images to Soundbuzz, developed the mobile versions of Man’s World Magazine, MF Husains paintings, and Uncle Pai’s comics (from Lalit Media).

More on the state of the company and our take on the deal:

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“Mobile Payments Only Sustainable With 20-25 M Customer Base”

“Our business model is sustainable only with a customer base of 20 million to 25 million. We expect to breakeven in three years”, Abhishek Sinha, CEO of Mobile Payments company Eko India Financial Solutions tells Mint. Now 20-25 million is a fairly large customer base, so are mobile payment companies waiting for a miracle?

While unspecified estimates quoted by Mint say that there will be 50-100 million mobile banking customers over the next two years, to expect 1/5th of the expected mobile user base to transact using the mobile phone would be far too optimistic. Also, even if that 50-100 million user base is going to be divided among MChek, Paymate, Obopay, Eko, CSam, Jigrahak, and maybe even Billdesk, it’s unlikely that any will have 20-25 million subscriber base, hence be sustainable.

In two years, Obopay is targeting 5-10 million customers, while MChek looking at “upto” 2 million. Going by Sinha’s reasoning, sustainability is a long way away. Eko is looking to raise $10 million in funding, with a target of 5 million customers in 2 years, and revenue of Rs. 50 lakh.

Another thing to bear in mind is that one may talk about revenues of Rs. 50 lakh, but like in the case of the Online Travel business, these are essentially pass-through revenues, and the service providers will get a small fraction of this. Banks are going to be an integral part of this system because mobile operators don’t want pass-through revenues added to their books, since it will result in an increase the license fee they pay to the government.

Do also take a look at some systemic issues pointed out by Ravi Shankar, EVP and Country Head-Cash Management & Direct Banking for Yes Bank at the IAMAI MVAS conference last month.

PayMate Closes $9 million Round Of Funding From Mayfield, KPCB And Sherpalo Ventures

Mobile payments company Paymate announced (BS) today that they had raised a second round of funding of $9 million. The funding has been led by Mayfield Fund, and Kleiner Perkins Caulfield and Byers (KPCB) and Ram Shriram’s Sherpalo Ventures have also returned as investors. Coruscant Tec co-founders Ajay Adiseshann and Probir Roy will retain majority stake. There are a couple of things to note here:

– The timing of the announcement: There have been reports that the RBI will release guidelines for mobile payments on the 15th of June, and I’m told that there was a seminar in Mumbai last week focused on the implications of these yet-to-be released guidelines. KPCB and Sherpalo have a history of investing in companies, and announcing the funding the time is right, so it’s possible that Paymate received funding a while back, but with all the expected buzz around mobile payments, it’s a timely press release.

– Where’s Citibank? Paymate had launched initially with Citibank on board, but if you go through their redesigned website, you’ll notice that Citibank isn’t a partner bank anymore. So while they added ABN Amro last month, and are in talks with SBI (India’s largest public sector bank), Paymate appears to have lost their first big banking partner. 11 banking partners are still on board, including Standard Chartered, Canara Bank, Cosmos Bank, HDFC (among India’s largest private sector banks), South Indian Bank, etc. Paymate also has operations in Sri Lanka, and a tie-up with Bank of Ceylon.

The Burn Rate, KYC issues and (more…)