Wirecard Forex India is a licensed authorized dealer under the regulations of the Reserve Bank of India and a remittance service provider in the country.
The acquisition will be that of Temasek Holdings Ltd. supported
the startup’s entry into the Indian market, where it will directly participate in a variety of payment services such as currency conversion, money transfer and prepaid card issuance, said Prajit Nanu, CEO of Nium, in a video interview with ET.
Nanu said the purchase of Wirecard’s Indian unit will give the company an Authorized Dealer License (AD2). The fintech startup will also apply for a prepaid payment instrument license (PPI) from RBI in order to issue its own payment instruments and branded travel cards.
“This piece has many use cases, our main objective is to issue branded travel cards through Wirecard’s existing partnerships in India,” said Nanu. “We will use this foundation to build our business in India. We will use our global brand, our geographic reach and this to revolutionize this market in India. ”
Nium claims it has issued approximately 30 million physical and virtual cards and is licensed in 11 jurisdictions, including direct card issuance in 24 countries and 40 currencies.
The acquisition comes at a time when India’s prepaid card market is expected to grow at an average annual growth rate of 40.5% between 2021 and 2026, Nanu added.
German payment company Wirecard AG became embroiled in one of the largest financial fraud cases in modern history after the company said last June that it was missing € 1.9 billion in cash on its books. The former CEO, the Chief Operating Officer, two board members and other senior executives have since been arrested and involved in criminal proceedings.
Several Wirecard assets around the world were subsequently put on the block.
Since August 2020, Wirecard has sold some of its subsidiaries in Brazil, the USA, the Philippines and Europe. The Indian Forex unit has 23 branches including New Delhi, Mumbai, Kolkata, Chennai, Gurugram, Hyderabad, Pune and Bengaluru. In FY20, foreign exchange payments worth Rs.1,200 billion were processed.
All 190 Wirecard India employees will switch to Nium after the takeover, said Pratik Gandhi, Nium’s chief operating officer.
The startup will also initiate a rebranding of Wirecard India, subject to the approval of RBI. 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 transition to digital payments as companies modernize their infrastructure to benefit from the post-pandemic economic recovery,” said Nanu. “More companies are turning to our global payment stack to quickly embed financial services. This acquisition expands our licensing portfolio, expands the range of digital payment services we can offer in India, and gives us a physical presence to provide more support in metropolitan areas. ”