 "Mahindrafinance")
Tech Mahindra, India’s fifth-largest information technology firm, is set to roll out a new joint venture (JV) company to handle its payments banking operations. The software major will form a joint venture with group company Mahindra & Mahindra Financial Services (MMFSL), also known as Mahindra Finance, and have strategic partnership with a few private entities including banks.
Tech Mahindra’s move to venture into the payments banking space is part of its strategy to increase revenue from small financial services practice. A payments bank will gather deposits and promote non-cash payments, but won’t lend.
“The JV would be announced in a month-and-a-half and it would be between Mahindra Finance and Tech Mahindra,” said Jagdish Mitra, chief strategy and marketing officer and head of growth factories at Tech Mahindra. He added the core team for the new JV has already been hand-picked. “It consists of 15-20 people who are from banking, finance and technology sectors. We also have a separate tech team consisting of 30-40 people,” added Mitra.
According to the company, the payments bank would possibly start from September next year. The company would also have strategic alliances with private entities who can expand the market in different areas.
According to Mitra, in the initial phase, the payments bank would be started in the north, west and east regions. Without disclosing the investments made into the project, Mitra said the company has poured in significant money into the technology part of the project.
“We have invested significantly in technology and R&D (research & development) in the past two-and-a-half years including things we have done jointly with the Silicon Valley. Tech investments have been more than business model investment. For us, tech would be the key differentiator,” Mitra added. Paving the way for its payments banking operations, Tech Mahindra launched India’s first contactless digital payment ecosystem, branded MoboMoney. It is a prepaid wallet issued in the form of a near-field communication (NFC) contactless tag.
It can be used to ‘tap and pay’ on a network of NFC-enabled merchant point of sales, allowing customers without an NFC-enabled phone to enjoy the simple tap-n-pay experience to purchase goods.
Further, with the increasing penetration of NFC-enabled mobile devices, MoboMoney Mobile Wallet application will soon be available to use the embedded NFC capability of mobile devices along with other cutting-edge technologies that would simplify and enhance the customers’ payment experience.
The company said it is approaching the corner stores and small-time vendors to expand its MoboMoney network.
Over the next five years, it is planning to reach out to a million such vendors and target as many as 150-200 million customers.
