Payments processor Visa Inc will pick up a minority stake in Indian payment gateway BillDesk in a bid to strengthen its position in the digital payments ecosystem in the country.
While the amount of investment was not disclosed, Visa, which is listed on the New York Stock Exchange, said on Friday its investment and collaboration will help BillDesk develop new product lines for its payments and loyalty business and extend reach to other geographies.
“As a leading payments player in India, BillDesk has been a long time business partner to Visa. This investment further reinforces our long-term commitment to India’s digital payments growth story,” said Chris Clark, Asia Pacific regional president of Visa.
“We now look forward to building new products and solutions that benefit merchants as well as consumers. Visa with its deep network and strong relationships is a great partner as well looking to offer our services in other markets,” said M.N. Srinivasu, co-founder of BillDesk.
Visa’s investment in BillDesk, subject to statutory approvals, is expected to have no direct bearing on its existing India business, the company said in a statement.
The Mumbai-based BillDesk processes over $60 billion of digital payments a year and provides customers payment options, including credit cards and online wallets, to carry out purchases and make bill payments. The company earns by charging commission from clients on these transactions.
Concerns
Visa had earlier expressed several concerns ranging from rising government interest to promoting homegrown payment systems and data localisation requirements.
“Certain governments, including China, India, Indonesia, Russia, Thailand and Vietnam, have taken actions to advantage domestic payments systems by imposing regulations that favour domestic providers, impose local ownership requirements on processors, require data localisation, or mandate domestic processing be done in that country,” Visa had said in its latest annual report.
“Governments such as in India may use regulation to further drive down merchant discount rates, which could negatively affect the economics of our transactions,” the report had said.
Union finance minister Arun Jaitley earlier this month had said Visa and Mastercard are losing market share in India to indigenously developed payment system of UPI and Rupay Card.
