Multinational payments processor Visa Inc said on Friday it is picking up a minority stake in Indian payment gateway BillDesk to expand its footprint in the South Asian nation.
Visa’s investment will help BillDesk, operated by Mumbai-based IndiaIdeas.com Ltd, develop new product lines for its payments and loyalty businesses and also expand its footprint into other regions, the American company said in a statement.
The investment will be subject to necessary statutory approvals and is unlikely to have any direct bearing on Visa’s existing Indian business.
“This investment further reinforces our long-term commitment to India’s digital payments growth story,” said Chris Clark, Asia Pacific regional president at Visa.
MN Srinivasu, co-founder at BillDesk, said the investment from the world's largest global payment network will help the Indian company build new products and solutions that benefit merchants as well as consumers.
BillDesk
In June this year, several media reports said that Visa was in final rounds of negotiations to invest $250 million in the Mumbai-based payments gateway firm in a mix of primary and secondary transactions.
The round was expected to value BillDesk at about $1.5-2 billion, reports had stated.
It is not clear if the current deal includes any secondary share sale.
Founded in 2000 by former Arthur Anderson employees MN Srinivasu, Ajay Kaushal and Karthik Ganapathy, BillDesk provides electronic transaction processing services to banks, e-commerce companies, telecom operators, and state utilities.
Private equity firms General Atlantic, TA Associates, Clearstone Venture Partners and Singapore state investment firm Temasek are among its investors.
The company acquired two firms so far: Mumbai-based Loylty Rewardz Management Pvt. Ltd, which it bought for $20 million in March 2015, and in early 2017, it bought a financial technology product from a Kochi-based company.
BillDesk competes with billing aggregators such as Citrus Payment Solutions, CCAvenue, Oxigen and RazorPay.
Visa
This is Visa’s latest partnership and investment with emerging payment innovators. It has previously invested in companies such as Paidy, Behalf, Marqeta, Payworks, Klarna, LoopPay (acquired by Samsung), Square and Stripe.
The current transaction would help Visa strengthen its position in India’s payments landscape which has witnessed disruptions due to the Unified Payments Interface (UPI).
On the second anniversary of demonetisation earlier this month, India’s Finance Minister Arun Jaitley said that Mastercard and Visa were losing market share to domestic payments networks like UPI and RuPay. The statement came months after Mastercard complained to the US government that Prime Minister Narendra Modi was using nationalism to promote local rivals.
Though RuPay, owned by many Indian and foreign banks, accounts for more than half of India’s 1 billion debit and credit cards, industry sources say Visa and Mastercard still process the vast majority of payments transactions in the country. Indian payments transactions were worth $51 billion in August this year, according to central bank data.