 Oxigen to gain from RBI's payments bank norm

The Reserve Bank of India's guidelines for payments banks has come as a shot in the arm for
prepaid issuers (PPI). Until a couple of years ago, the RBI had always viewed PPI with
caution and ensured that the payments space is dominated by banks. RBI governor Raghuram
Rajan's new norms for payments banks, however, seem to fit PPIs to a T since they have
almost all the constituents - customers, distribution and the platform. Becoming a payments
bank fills the two missing components for current PPIs - earn interest on deposits mobilized
and provide customers the option to withdraw cash. Oxigen is one such PPI which believes it
makes the mark and is preparing its application for a payments bank licence. Oxigen founder
Pramod Saxena is all set to raise $50 million (Rs 300 crore) through a combination of private
equity and strategic investment. This is on the back of close to Rs 150 crore already made by
the company.

 Oxigen Services India, one of the country's largest payment solutions providers, is in talks
with investors to raise as much as $200 million (about Rs 1,230 crore) as the company looks
to transform itself into a payment bank and step up its mobile wallet offerings.
 Private equity firms, strategic investors and development financial institutions are in talks
with the Gurgaon-based company, with the first tranche of $50 million expected to be closed
by the end of the year, according to two sources directly involved in the transaction.
 Oxigen Wallet has signed an agreement with BookMyShow, offering 20% cashback on each
transaction.
 Oxigen Mobile Wallet is awarded the ‘Best Prepaid Issuer’ at National Payments Excellence
Awards 2014 by NPCI

Promod Saxena, chairman, Oxigen, told dna, "Though we may not look at a joint venture route we
will certainly look at equity investments from banks. Leading banks like SBI, ICICI Bank and
Ratnakar Bank for whom we work as business correspondents may be keen to take an equity stake in
the payments bank we set up."

A payments bank needs a paid-up equity of Rs 100 crore with promoters holding 40% stake. The draft
guidelines had talked about equity dilution of the promoter holding but in the final guidelines the
promoters can hold on to their stake with the bank having to go in for listing only if its net worth
reaches Rs 1,000 crore.

"For these kind of businesses a longer gestation period is important as the investors need to be firmly
in control to drive the initial phase of the business. Banks' financial inclusion programmes are closely
associated with our business," said Saxena.

"The payments bank will also allow us to issue debit cards and participate in the remittance business,
particularly in the cash segments which is 50% of the total remittances into India. In calendar year
2013 the total remittances into India were Rs 7,000 crore, and 50% of this was cash-to-cash segment,"
said Saxena.

What is a Semi Closed Mobile Wallet ?

Payment solution service company, Oxigen Services India Private Limited, has launched a social
mobile wallet service, Oxigen Wallet. With the new service, people will now be able to share money
with their friends and family over their preferred social networks and messaging platforms like
Facebook, WhatsApp, Google+, and Twitter.
The wallet can also be used to recharge one’s mobile phones, pay bills and shop across a large number
of online merchants. Oxigen, which has processed over 2 Billion payment transactions exceeding INR
20,000 crores, through small retail, modern retail chains and banking websites sees the potential of
social media usage to bring innovative solutions to the market and simplify payments.

This is the first of it’s kind semi-open wallet in India where customers can, besides paying for bills
and recharges, can also transfer money to anyone, even to a non-wallet user, as well as directly into a
bank account. The money is loaded into the wallet via debit or credit card, where Oxigen charges a
small 1.5% loading fee.

In ‘semi-closed’ or ‘semi-open’ mobile prepaid instruments, you can load money into your cell phone
from a licensed company and make payments with it, but you can’t use it to withdraw money directly
from retailers by bypassing the bank. Mobile wallets that revolutionised financial services systems in
countries such as Kenya are ‘open’ ones, which you can use both for making payments and
withdrawing cash.

Product / Business line –

Distribution / Franchising Oxigen is a service aggregator and Payment Solution provider. Oxigen’s
presence pans India and also covers rural areas with more than 1, 50,000 retail
touch points which connects 30+ crore consumers to 50+ services. The
technology used to distribute these services to retail is unmatched. We make our
services available through our channel partners, using a variety of dispensation
modes, to suit the budget of a Retailer.

Oxigen supports small entrepreneurs and businessmen to become channel

partners either as a Retail Outlet (RO) , a Retail Management Unit (RMU or
Distributor), or a Banking partner for SBI CSP Kiosk Banking / Oxigen ICICI
Money Transfer Agent, if the individual has a good network in the market.

As Oxigen’s channel partner, you can dispense services like Mobile recharge,
Bill Payments, DTH/TV recharge, Hotel booking, Broadband recharge, Movie
tickets, Mobile Wallet top-ups, Airline tickets, Indian Railways Tickets
(IRCTC) etc. Retail Outlets can use their trading balance or wallet balance to
dispense these services to their customers. Apart from recharges and bill
payments you can also help your customers to make Instant Oxigen Money
Transfers from one Oxigen Wallet to another or from one wallet to any bank
account pan India. Some of the biggest Modern Trade houses like Croma,
Pantaloon, Planet M, Vishal Mega mart, Next, TMS, Aadhaar, Basix, Big
Apple, Digi World, E Zone, Poorvika retail, RDRL, Sahara Q Shop, Vijay Sales
are also our corporate channel partners, selling services through our point of sale
devices. Additionally Oxigen Money Transfer facility is a secure and instant
transfer facility that is available 24X7.
Business Modes Oxigen has following diverse methods of Dispensing / Vending
it's Services. With low investments, one can look at using a single
platform where a retailer can access the recharges, bill payments,
money transfer and banking businesses.
 Point of Sale Terminals (POS)
 Web & Web Apps
  Mobile & Mobile Apps
Services Oxigen Wallet Services - Oxigen Wallet is one stop shop that
satiates all your online payment related needs. It can be used to
Recharge Mobile, DTH &Broadband data, Money Transfer,
Utility Bill payments and can be used with online merchants like
Book My Show, Dominos, Ebay, Jet Airways, Hungama, Nokia
Mix Radio etc

Services at Retail – Along with the wallet services mentioned

earlier oxygen wallet services can also be used in Banking
Services such as SBI Kiosk Banking, Oxigen – ICICI Bank
Money transfer agents and Yes Bank Agent and IRCTC