Ebix Inc, the parent company of ItzCash, has acquired Money Transfer Service Scheme (MTSS) Business of YouFirst Money Express Private Limited for an undisclosed amount. This is Ebix’s second acquisition in the month and bought the money transfer assets of Wall Street Finance Limited on August 17. The company mentioned funded the transaction using its internal cash reserves. Ebix added that the acquisitions will be accretive to its earnings immediately.
ItzCash is now diversifying to international inward remittances and the acquisition will give Ebix access to an MTSS licence. Meanwhile, YouFirst Money Express says that it has a market share of almost 15% percent of Western Union’s India inward remittance flows. It handles over 2.3 million transactions annually with an annual throughput of over $800 million.
ItzCash had entered cross-border remittances with a partnership with Prabhu Money Transfer, a remittance company in Nepal, allowing Nepali migrants in India to send money back home.
The acquisitions will be consolidated into the Ebix ItzCash’s Financial Exchange operations. When Ebix acquired 80% of ItzCash’s stake, the companies said that they would be building a Financial Exchange and wanted to expand to insurance, lending & credit, mutual funds & investments segments. The two acquisitions will also help ItzCash build its distribution and financial exchange. Currently, the exchange has 75,000 outlets from ItzCash and the deal will increase the number of outlets to 94,000 across the country.
Financials and new businesses
ItzCash reported revenues of Rs 250 crores for the financial year 2016-17 (FY17), a growth of 40% year on year (from approximately Rs 180 crore), and turned profitable. Some of the new businesses started by ItzCash include:
– Third party POS terminals: The company said in April that it will deploy 100,000 POS terminals targeting small businesses and shopkeepers in the year. It had started the POS business in early December 2016 and so far has deployed 30,000 terminals. This is a new segment for ItzCash, and is a space that already has competition from Mswipe, Ezetap, Oxigen and PayU.
– Invested in Finly: In February, ItzCash made an undisclosed equity investment in Bangalore-based expense management company Finly which works in the corporate expense management space.
– BBPOU: In July 2016, it got an approval from the RBI to launch a Bharat Bill Payments Operating Unit (BBPOU). The National Payments Corporation of India (NPCI) set up the Bharat Bill Payment System (BBPS), a centralized interoperable bill payment system. BBPOUs are units which can create an agent network and will be responsible for on-boarding billers and aggregators.
RBI to allow wallets to make cross-border remittance
In May, the Reserve Bank of India (RBI) opened new avenues of business. Wallets might be able to undertake cross-border inward remittances, according to its new draft guidelines. However, the wallets need to be fully KYC compliant and issuers can enable this facility only on explicit request of the customers. To begin with, a per transaction limit of not exceeding Rs 5000 for such cross-border transactions shall apply, the RBI said. However, the maximum value in these wallets at any point of time shall not exceed Rs 50,000.