Singapore-based Nium has signed a definitive agreement to acquire fraud-hit Wirecard’s foreign exchange unit in India, as part of the latter’s insolvency process.
Wirecard Forex India is a licensed authorized dealer under the Reserve Bank of India’s regulations and a remittances service provider in the country.
The acquisition will mark the Temasek Holdings Ltd.-backed Fintech startup’s entry into the Indian market, where it will directly engage in a variety of payment services activities such as currency conversion, money transfer, and prepaid card issuance, Prajit Nanu, the chief executive officer of Nium, told ET in a video interview.
Nanu said the purchase of Wirecard’s India unit will give the company an authorized dealership (AD2) license. The fintech startup will also apply for a prepaid payments instrument (PPI) license with RBI to issue its own payment instruments as well such as branded travel cards.
“There are many use cases to this piece, our primary objective is the issuance of branded travel cards through Wirecard’s existing partnerships in India,” said Nanu. “We’ll use this foundation to build our business in India. We’ll leverage our global brand, our geographical reach and use it to disrupt this market in India.”
Nium says it has issued about 30 million physical and virtual cards and is licensed in 11 jurisdictions, including direct card issuing capabilities in 24 countries and in 40 currencies.
The acquisition comes at a time when India’s prepaid card market is expected to grow at a compounded annual growth rate of 40.5% between 2021 and 2026, Nanu added.
German payments firm Wirecard AG became embroiled in one of the largest financial scams in modern history after the company in June last year said €1.9 billion in cash was missing from its books. Its former chief executive, chief operating officer, two board members, as well as other senior executives have been arrested and implicated in criminal proceedings since.
Several of Wirecard’s assets around the world have subsequently been put on the block.
Since August 2020, Wirecard has sold some of its subsidiaries in Brazil, the United States, the Philippines, and in Europe. It’s India forex unit has 23 branches, including New Delhi, Mumbai, Kolkata, Chennai, Gurugram, Hyderabad, Pune, and Bengaluru. In FY20, it had processed forex payments worth Rs 1,200 crore.
All the 190 employees of Wirecard India will join Nium after the acquisition, said Pratik Gandhi, the chief operating officer of Nium.
The startup will also initiate a rebranding exercise of Wirecard India, subject to RBI approval. It will conduct financial due diligence as part of its own compliance process, Gandhi said.
This acquisition, Nium’s second in just over a month after European virtual card issuer Ixaris, is expected to close in the third quarter of 2021. “We’re seeing an accelerated move to digital payments as companies modernize their infrastructure to capitalize on the post-pandemic economic recovery,” said Nanu. “More companies are turning to our global payments stack to embed financial services quickly. This acquisition broadens our licensing portfolio, extends the suite of digital payments services we can offer in India, and provides us with a physical footprint to provide more support in metro areas.”
(Except for the headline, this story has not been edited by The Technology Express staff and is published from a syndicated feed)
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