My Mobile Payments Ltd (MMPL), a Calpian backed mobile payment service provider, has finally launched its prepaid ‘Money-on-Mobile’ (MOM) service. The service allows customers to load money into its mobile wallet through retail shops, and use for paying mobile phone bills, electricity bills, recharging DTH services, bus booking etc. The recharges are available in multiple denominations starting from Rs 20, with an upper limit of Rs 50,000. Note that MMPL has a prepaid payments license from the Reserve Bank of India, which is received in 2011. The RBI allows non banking applicants to offer semi-closed wallets – users can deposit but not withdraw cash, and can use the money only for making payments. Other companies with prepaid licenses include: Atom Technologies, Bharti Airtel (Airtel M Commerce Services Ltd), OSSCard/ OSS Payments, PayWorld / Smart Payment Solutions, Beam-Suvidha, Paymate, for its prepaid payment instrument called Giftmate, Oxigen Services (India) – for its prepaid payments instrument OxiCash Cards, ZipCash, among others.
In a statement, the company said that they’ll focus on the market that has no other mode of payments except cash, and look to add 2,00,000 retail outlets to its existing number of 82,000 by the end of 2012. MOM claims to have a presence in 300 cities, as many as 500,000 subscribers, and says it has a daily turnover of Rs 20 crores. To be honest, this appears to be exaggeration – while we don’t have data specifically for MOM, but according to information we’ve just received from the Reserve Bank of India, incumbents like Itz cash average around Rs 5.45 lakh per day, while Oxigen averages around Rs 6.15 lakh per day.
A few months ago, MMPL had announced its fun raising from Calpian. Interestingly, Calpian had invested in a company called Digital Payments Processing Limited (DPPL), which entered into a services agreement with MMPL. DPPL is managed by MMPL’s management team. Calpian has structured its investment in DPPL as an initial and second funding totaling $2.5 million, then quarterly tranches of approximately $1.2 million each over the next six quarters, resulting in a cash infusion of $9.7 million. Apart from this, a total of 6,123,077 shares of its Common Stock will be issued over the 6 quarters, although 4,863,077 of the shares are subject to being reclaimed by Calpian if certain financial performance metrics are not achieved. At the end of the transaction, Calpian will own 74% in DPPL.
More on the deal here.
(With inputs from Aman Rai)