India's largest private sector company forays into payments

Payments industry is full of new product launches and startups these days. Why should the monoliths be left behind. Reliance (Mukesh Ambani wing) is going to launch payments services. They got a semi-closed prepaid services license from regulator in India. What is important to note is that Jio is the same venture which is bringing VoLTE (4G) services in a big way in India. Given their financial muscle, they are expected to make a big splash in the telecom market. Combining Value added service like payments makes a lot of sense for them. Mukesh is known to have the ability and bring sheer scale to impact entire industry in India.

Many people think about mobile payments in this country as only being limited to mobile recharges. Its not!

Any player worth his salt is not beating up all the drums to do just mobile recharges. There are already DTH, Toll and other services being added by players like PayTM. But the ground breaking development in payments is going to be around retail merchants and the payments there. We call it proximity (card present, contactless, etc.) payments. Knowing Reliance and Mukesh, I can tell you that he is going after the latter which is the bigger game.

Reliance Payment Solutions Ltd. (RPSL) is a subsidiary of Reliance industries Ltd. Group. The company says that its solution helps to identify and enter into an agreement with any store, shop, restaurant, retail outlet and other merchant establishments. RPSL acquired the RBI approval on 18th September 2013 for their Mobile based prepaid wallet. The term of license is 5 years.

The Jio Money service offers a prepaid m-wallet to customers. The wallet enables users to store money and purchase goods & services. Withdrawal of cash from the wallet is not allowed.

The current offerings of Reliance Payment Solutions include:

  • R-Pay – a prepaid cards that allows users to load money, send cash to other R-Pay users/Bank Accounts and pay for any purchases.
  • R-Pay Wallet – Stores the customer’s R-Pay card securely. It gives the users an option of storing their debit/credit cards and details of bank account. The wallet also enables payment at various merchants online and in-store.

Reliance is not the only big company getting into the payments space. There has been Zee group with ITZ cash card, Tech Mahindra got a license recently as well. Tech Mahindra Ltd: Received their license on 19th September 2013 and is valid upto 18th September 2018. Tech Mahindra offers an m-wallet solution know as ‘MoboMoney’.

Overall, RBI has approved license for 21 prepaid solutions. The other companies to hold a license include Airtel M Commerce Services Ltd, Atom Technologies, PayWorld, UAE Exchange and Financial services Ltd., Sodexo SVC India Pvt. Ltd., Done Card utility Ltd., OSS Payments, ZipCash Card Services Pvt. Ltd and Muthoot Vehicle & Asset Finance Ltd.

Mobile wallets that have existed for a while now are MobiKwik and PayTM. Mobikwik was established in August 2009 by Bipin Preet Singh (CEO). Mobikwik wallet seeks to empower people with the ease of one click transactions and storing upto INR 50,000.Its a semi-closed prepaid instrument. This could be used for activities such as paying bills – prepaid, postpaid, DTH, Data transactions, gas, electricity, landline and insurance.