Mobile payments company Paymate is surrendering its wallet licence to the Reserve Bank of India (RBI). The RBI website shows that the surrender process began in February 2017. The company has a pre-paid payment instruments known as Paymate Wallet.
“We have been business-to-business (B2B) payments focused processing over $2 billion annualized with sustainable unit economics and have no requirements for a wallet,” Ajay Adiseshann replied to an email to MediaNama.
Paymate pivoted from a business-to-consumer (B2C) business to a business-to-business model (B2B) in November 2014. At the time, it had mentioned that was targeting small and medium business operating in the travel segment. It company claimed that it is on its way to get on board 20,000 SMBs. In February the company had over 13,000 registered businesses on its platform.
Paymate raised $14 million as indicated by CrunchBase. It had raised $9 million in 2008 from Mayfield Fund, Kleiner Perkins Caulfield and Byers (KPCB) and Sherpalo Ventures. It had raised $5 million in a round of funding in 2006 KPCB and Sherpalo Ventures.
In May 2016, the RBI issued guidelines to digital wallet companies who wish to surrender their licences. The RBI mandated wallet companies need to send notices to customers which indicate that customers can spend the amount in wallets or opt for a refund to their bank accounts within a time period.
Most recently, Citrus Pay said it would surrender its wallet licence after it was acquired for $130 million by PayU. Other wallet companies which are surrendering their wallet licences include Atom Technologies which runs wallets called ‘Atom Wallet’ and ‘Aquapay’.
RBI says that it is in the process of winding down three wallet providers – Beam Money, Done Card Utility and OSS Payment solutions. In July 2013, Beam Money surrendered its licence to the RBI and at the time Anand Shrivastav, Chairman at Beam Money told MediaNama that semi-closed prepaid wallets did not make financial sense to the company. One of the major drawback, he said, was that it did not allow users to withdraw money from the wallet, which is important for a consumer company.