Hitachi’s FinTech crusade, buys Indian firm Prizm Payments

In one of its biggest strategic investments in recent years, Japanese engineering and electronics maker Hitachi Ltd. has acquired a major stake in Chennai based Prizm payments. Winvest Holdings (India) Private Limited, Sequoia Capital, Axis Bank and other minority shareholders will be selling their stake to Hitachi.

Hitachi had also recently acquired eBworz Berhad, a Malaysia headquartered financial IT solutions company. Prizm has a strong presence in the FinTech space in India with a revenue of $80 Mn (500 cr) annually. Hitachi's acquisition of Prizm will help them in establishing a strong foothold in the field of payments. Hitachi is also pretty keen on earning a bigger place in the booming Indian technology and IT market. The deal value has not been disclosed but it could be in the range of $250 to $500 Mn.

Prizm payments was co-founded in the year 2008 by Raghu Nathan and Loney Antony. Since then the company has grown to become a leader in providing innovative financial services with over 10,000 ATMs and 52,400 POS devices under management. Recently Prizm payments partnered with Mswipe technologies and Axis bank to provide mPos service to merchants.

Solutions provided by Prizm:

ATM Services: Prizm offers its solutions to the service providers by which it will offer services to banking businesses that are not core to them and help them in the management of ATM network.

POS Services: Prizm acts as a transaction provider by offering its technology solutions to connect POS to a switch, connect to international and national networks and provide users with back office tools for management of networks.

Transaction processing services: Prizm payments act as an exclusive TPS provider for Mswipe mobile POS terminals. Mswipe had come up with the hardware focusing on bringing the concept of peer to peer card based system to the Indian market, by offering an innovative service that will work not just with smartphones, but with the feature phones as well. Mswipe came together with Prizm Payments, and did an pilot rollout covering about 200 merchants by end of August, 2012.

Prizm Payments had got the distributorship for Mswipe’s device as well as the transaction processor and the infrastructure which connects into Visa and MasterCard. Mswipe gets its share for each hardware unit sold to the merchant, while Prizm earns a percentage share from whatever transaction fee is charged by the bank.

Hitachi's rationale

Hitachi sees India as an important region in its strategic development. One of the drivers behind acquisition of Prizm payments is rise in popularity of cashless payments. Hitachi considers FinTech to be a big growth area and wants to expand in the BFS segment in the region. The deal provides the management team and employees tremendous potential for growth, according to Looney Antony managing director of Prizm Payments.

'Hitachi is endeavoring to strengthen IT services businesses in the fast-growing Asian region in particular. Having Prizm Payment Services as Hitachi family, we believe that we can create new value together by wedding the company's strong customer base and payment service and other know-how in India, with Hitachi's IT expertise and strive to expand the Hitachi Group's IT services business in India and globally,' said President of Hitachi Ltd., Hiroaki Nakanishi.

Hitachi seeks to increase its revenues in India from 100 Bn Yen in 2012 to 300 Bn Yen by 2016.

Other Deals in Indian Payments Space:

Amongst the payment based start-ups in India, the latest to get funding was Livquik. Snow Leopard Technology Ventures funded an undisclosed amount to Livquik in August, 2013. The funds will be used to expand the engineering, operations and marketing teams of the company. Livquik is all set to launch QuikWallet.

My Mobile Payment’s Ltd. a Mumbai based mobile payment firm is all set to raise its series B funding between $75 Million – $100 Million. The funds will be aimed at increasing revenue and expanding existing operations to support revenue growth. Last year i.e. in 2012, the company had raised $29.7 Million from Calpian Inc, which is a Texas based company dealing with electronics payment processing.

MSwipe which is a Mobile Point of Sales company raised an undisclosed sum as funding from Matrix Partners which is a Venture Capital firm. MSwipe manufactures mobile payment devices and also offers an app which can be run on Android, Java and IOS devices. MSwipe device can be plugged into a audio jack of a mobile phone to enable payments.

Beam Money is planning to raise another $20 Million as part of the second round of investor funding.