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Infibeam looks to set up Payments Bank, Wallet; and raise Rs 2000 crores

Infibeam has sought shareholder approval to raise money by issuing “Securities for a value not exceeding Rs. 2,000 crore”, and is holding an extraordinary general meeting to modify its Memorandum of Association, to enable it to apply for a Payments Bank and a Prepaid Wallet license with the RBI. In addition to this, it is looking to carry on the business of “online multi-brand retail trading activity through web portal, online advertising and ticketing for entertainment events, web services and data centre services including and not limited to cloud services, storage and compute, hosting, domains, storage, data analytics and other software services.” The company is also looking to change its name to Infibeam Avenues Ltd: the company had acquired Avenues India, which runs one of India’s oldest payment gateway businesses, CC Avenues.

At present, there are five payments banks operating: Airtel, which has been rather controversial because it opened accounts for customers without informed consent, FINO, Paytm, Jio, Aditya Birla Payments Bank and India Post, and the sector has seen a few bailouts. If Infibeam gets into this domain, they will be competing with Alibaba’s money (Paytm), government support (India Post), and cross-domain synergies (Jio, Airtel) and financial sector synergies (Aditya Birla Finance payments bank). Entry into the struggling wallets business will probably be as a support to the payments bank, giving the bank the ability to issue multiple types of payment instruments, such as “Semi Open Prepaid Payment Instruments,  Semi Closed System Payment Instruments, Open System Payment Instruments, e-wallets, Co-Branded Wallets etc.

Corporate-facing Payments Bank?

For the most bit, even though it started as a consumer facing business, Infibeam has been an enterprise business: its software businesses enables ecommerce platforms for brands and retailers, and following the acquisition of CC Avenue, it has a payments gateway service to provide on top of that. With CC Avenue, it also acquired the ability to offer bill payment services, via the BBPOU (Bharat Bill Payment Operating Unit) license it had. Infibeam is the government’s official partner for GeM (the government e-marketplace). It remains to be seen what kind of an approach Infibeam will adopt in the payments: there has to be a direct to consumer element here as a bank, but will this mostly be about developing a payments bank targeting primarily businesses, with salary accounts?

Infibeam posted a net profit of Rs 20.8 crore this quarter, a 53% increase from the same quarter in the previous year. In 2018, the company’s annual net profit grew by 102%, nearly double the annual growth.

Recent Infibeam moves

  • Infibeam acquired Unicommerce, a “cloud-based inventory management” company. Unicommerce was a wholly owned subsidiary of Snapdeal before the acquisition.
  • It acquired Vavian International Limited, a payments processing company headquartered in Dubai, for around $1.2 million.
  • The company launched BillAvenue under the Bharat Bill Payments System in November last year, for utility and service recharges.
  • In April, Network18’s venture investment arm pumped ₹40 crore into Infibeam, with a stated long-term aim to integrate Infibeam’s services into Network18 offerings.

https://www.medianama.com/2018/02/223-rbi-payments-banks-kyc-guidelines/

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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