NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, March 30, 2015

Payment solutions provider Oxigen is on a major expansion drive that includes hiring about 1,500 people and ramping up its payment network across semi-urban and rural India. The firm is also eyeing a large share of the remittances market and prepares the ground for launching a payments bank.

To fund its expansion drive, the Gurgaon-based firm is in advanced talks with investors to raise funds in the range of $150-200 million (Rs.938-1,250 crore), a major part of which is expected to materialize by June this year. “We are gearing up to expand our support system and the infrastructure for services aggregation, distribution as well as payment processing and collections in semi urban and rural areas, particularly the east and central India,” Oxigen chairman and managing director Pramod Saxena said.

On raising capital to fund its growth, Saxena said: “We are in advanced stage of talks with investors. The amount is in the range of $150-200 million out of which we will announce raising a significant amount in the next two-three months.” The firm has approached the Reserve Bank of India (RBI) for a payments bank licence as it seeks to be a part of government’s financial inclusion programme and aims to tap the expanding remittances market in India—a $73 billion opportunity that is growing at the rate of 7% annually, he said.

The payments bank will promote financial inclusion by offering small savings accounts and remittance services to the migrant workforce, low income households as well as small businesses and Oxigen, with its reach and experience, is the best suited to be a part of this drive, he added. “We are also expanding our workforce. We are looking at expanding Oxigen Wallet across functions such as technology, marketing, business development, design, customer care and operations and for this will hire 500 people in the next one year,” Saxena said.