Mobile PoS-based (Point of Sale) payments are still a new concept in India. Although some players have recently come up with mobile applications for PoS-based transactions, for a vast majority of Indians who still use feature phones, those are still to be tried and tested. That is where Chennai-based Prizm Payments comes in. Set up in 2008, this Sequoia Capital-backed payment services firm has already gained a foothold with its ATM deployments and has also partnered with MSwipe Technologies and Axis Bank to provide Swipeon, a mobile phone-based card acceptance service. With this solution, Prizm targets feature phone users in a bid to promote PoS-based payments. In an interaction with VCCircle, Prizm Payments MD Loney Antony talks about the company's expansion plans, the Indian m-payment market and more. Here are the excerpts.
How is mobile PoS payment in India picking up?
Compared to developed economies like the US, mobile-based transactions are still at a nascent stage here in India. Out of the total money transactions carried out here, mobile payments account for just 3 per cent. So India still has a long way to go.
Our products mostly target customers who are currently dealing with a lot of cash but are not able to accept mobile or card payments. Keeping them in mind, we have created a platform to promote mobile PoS transactions in the country. And we see a huge opportunity for our mobile PoS solution as we are targeting a vast majority of customers who only use feature phones. This solution enables customers to carry out transactions with their banks via their handsets. In fact, many retail banks and mobile operators have already started working in this direction.
Of course, consumers are empowered by the solutions deployed through banks and mobile operators. But we also need specific locations where these services could be leveraged and merchants/retailers would be able to accept mobile payments. Today, more companies are coming up in the market to provide innovative payment services through new products, new software or new mobile functionality. But all of them are mostly focusing on the consumer side. Our key differentiator is that we are creating an acceptance network which would facilitate consumer transactions and benefit the businesses.
What is your revenue model and how has it grown since you started?
Most of our revenues are transaction-based. If a bank is using some equipment to facilitate our services, that equipment cost is covered through a fixed reimbursement. And the cost of transaction processing is covered by a per-transaction price. A per-transaction price for an average e-transaction can be anywhere between 60 paise and Rs 2. An ATM transaction price ranges from Rs 4-Rs 14, depending on the type of transaction.
In terms of revenues, we have been growing quite aggressively since launch. We grew from a modest Rs 13 crore in 2008 to Rs 314 crore for the year ended March 2012. Our target is to become a Rs 1,000 crore company in terms of revenues in the next couple of years. But we have not charted out any special plan to achieve this. We hope to reach this target with our existing plans.
What is your growth strategy in India? Do you plan to go global?
Our growth will be through ATM and PoS deployment. Currently, we are managing close to 11,000 ATMs and around 35,000 PoS facilities across various retail banks in India. Going forward, PoS solutions will be our key growth drivers and we will continue to focus on payment services.
Wherever this model is replicable and we can take a product/service to another country, we will do that. We find that South Asia and South-east Asian markets are more suitable for us as similar solutions are not available there. However, we have no plans to expand to developed markets like the US, where mobile payments have already grown tremendously.
Our staff strength has grown as well â€“ to a team of 1,000 from a mere 50 when we started in 2005. We are definitely planning to add more people to our team, depending on which areas we would be growing.
How about the next round of funding or bringing in a strategic partner?
A lot of unnecessary speculations are going on, but we don't want to respond to those. For instance, there were media reports about the NTT acquisition. But those reports are completely speculative.
Then again, there's another report that said we are raising $100-200 million to drive e-commerce and also to expand business to other geographies. As of now, we have no plans to raise funds. If we are doing something, we will definitely inform the media. But it is too early to comment on these things.
How do you read the emerging trends in the Indian mobile payments market?
There are three important trends that we see in India â€“ IMPS (Interbank Mobile Payment Service), mobile PoS and mobile wallet. Some mobile operators in India are already trying to look at pre-paid wallet services. But to achieve a huge growth in these segments, India's infrastructure should grow.
(Edited by Sanghamitra Mandal)