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Spice Digital gets a wallet license from RBI

SpiceXDigital

Mobile VAS and Internet products company Spice Digital has received a semi-closed pre-paid payments wallet license from the Reserve Bank of India (RBI). The RBI website shows that the company was given the license earlier last month and is valid till up to June 30, 2020.

Nachiket Mor committee recommendations and payments banks

It’s worth remembering that the Nachiket Mor committee in its report had recommended ending the prepaid payments instrument (PPI) license and that companies should instead apply for a payments bank license instead.

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Given the difficulties being faced by PPIs and the underlying prudential concerns associated with this model, the existing and new PPI applicants should instead be required to apply for a Payments Bank licence or become Business Correspondents. No additional PPI licences should be granted.

However, The RBI in its final guidelines for payments banks said that companies with existing PPI licenses could opt to convert to a payments bank license and that it was not mandatory for an existing PPI issuer to apply for the same and it may continue as a PPI issuer.

Existing PPI players who have applied for a payments bank license include Paytm, Vodafone India, Idea Cellular, Bharti Airtel, MobiKwik, Itz Cash and Reliance Industries. So far, the RBI has received 41 applications for payments banks. If Spice Digital is looking at a payments bank license, then it seems that it has arrived late for the party.

Earlier in November, the RBI renewed Vodafone India’s mobile wallet licence. Last year, Idea Cellular, Reliance Industries, Paytm Mobikwik, QwikCilver Solutions Pvt Limited and DigitSecure India Pvt Limited got their pre-paid payment instrument licence from the RBI. It also worth noting that  Vodafone India had also signed a strategic partnership with Bharat BPO, a Spice Digital* group company to integrate M-Pesa as one of the payment options for Bharat BPO’s SMS railway ticket booking service in September last year.

Revenue from Spice Mobility’s services business increased to Rs 50.15 crore for the quarter ended March 31, up 2.93% from Rs 48.72 crore in the same quarter last year and up by 6.22% from Rs 47.21 crore in the preceding quarter.

Other deals by Spice Digital

– In January, Spice Digital acquired 38.53% stake in the Noida-based online education provider Anytime Learning Private Limited for an undisclosed amount, following which Anytime Learning has become an Associate Company of Spice Digital.

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– In September last year, the company had acquired 26% stake in Bangalore-based startup Vavia Technologies, which operates the SMS-based search engine txtBrowser, for an undisclosed amount.

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