US-based payment processing firm Mastercard has announced its commitment to invest ₹7,000 crores ($1 billion) over the next five years in India. The company has already invested around ₹7,000 crores ($1 billion) between 2014 and 2019 in the country. The additional tranche of investment will be used to establish a domestic transactions processing center in Pune.
Out of the ₹7,000 crores investment, only ₹2,100 crores ($300 million) will be used for setting up a domestic transactions processing center. The rest ₹4,900 crores ($700 million) will be used to invest in services hub that would take care of aspects like authentication, fraud and security solutions, and analytics for Indian customers. These facilities will be set up in multiple locations.
The company also has plans to invest in fintech startups in the country. Earlier in 2018, Mastercard had invested in Bengaluru-based digital payments startup ToneTag. The company is constantly evaluating opportunities to invest in fintech startups since then. Mastercard’s India Investment Fund invested in Hyderabad-based Syntizen which is a B2B digital identity-centric product startup incubated at T-Hub.
Commenting on the strategic investment and the longer-term business strategy, Ari Sarker, co-president, Asia Pacific, Mastercard said, “India is a unique country with a progressive payments ecosystem. We are excited with our incremental and significant investment plans for this market, which we believe will be compelling differentiators for us. This investment builds on what is an enduring and focused strategy for us in this market, and will also enable us to explore avenues to expand our local collaborations and partnerships while deepening our commitment to the government’s vision of moving towards a cashless society.”
The US-based payment processing giant has already inaugurated its offices in Bengaluru and Gurugram. Mastercard has also opened Mastercard Lab & Operations Hub in Pune in 2017 and a Technology Center in Vadodara. The company has around 2000 employees in India which are far more than when it launched in 2013. It had a mere 29 employees in 2019. Currently, India represents 14% of Mastercard’s total global workforce.
India Investment Fund has invested in multiple startups like Razorpay, Zeta, Happay, SignZy, ftcash and Fluid AI. With its investment in Syntizen, Mastercard is trying to use the power of Aadhaar-based authentication solutions. Syntizen, founded in 2014, helps check attendance in government-run schools for mid-day meals by connecting to the biometrics database. The startup has already helped Greater Hyderabad Municipal Corporation save ₹50 crores in wages.
Mastercard has also collaborated with the India Post Payments Bank (IPPB) as its exclusive authentication service agency. It helped the government-owned payments bank to open 1.9 crore accounts and handle 9,75,000 transactions between January 2017 and December 2018.