Tech Mahindra may form a joint venture with group company Mahindra & Mahindra Financial Services (MMFSL) and tie up with an arm of the World Bank if its application to establish a payments bank gets the Reserve Bank of India’s approval.
The software company’s move to venture into the payments banking space is part of a larger strategy to increase revenue from its small financial services practice. A payment bank will gather deposits and promote non-cash payments, but will not lend.
“We are currently in talks with IFC (part of the World Bank) and a bunch of telecom companies. We are seeing a lot of interest from potential partners,” said Jagdish Mitra, Tech Mahindra’s head of Mobility Business.
The ultimate goal is to take the payments banking expertise to overseas markets where the IT firm competes with larger peers Tata Consultancy Services, Infosys and IBM.
Tech Mahindra would invest in excess of the ₹100-crore minimum investment stipulated by the RBI for setting up the payments bank, said Mitra.
IFC is an international financial institution that offers investment and asset management services to encourage private sector development in developing countries while MMFSL is a rural non-banking financial company headquartered in Mumbai. The IFC partnership will help the Mahindras tap into the former’s experience of working with investee companies globally in the payments banking space.
Two platformsTech Mahindra is active in the mobile payments space through two platforms — MoboMoney and Mobiquity. MoboMoney, which was developed by the company’s wholly owned unit Comviva, has RBI licence to offer pre-paid wallet services till 2018.
Mobiquity connects banks, payment gateways and merchant websites to deliver a range of financial services on mobile.
Tech Mahindra has a stated goal of doubling its financial services revenue to 20 per cent of overall sales in the next few years.