The Reserve Bank of India’s (RBI) new rules on cross-border payments will bring fintech players operating in this space under the regulator’s direct supervision. More details on this in today’s ETtech Morning Dispatch.
Also in the letter:
■ Mamaearth parent’s IPO subscribed 7.61 times
■ Cyberattacks on healthcare sector rising: report
■ HCLTech founder Shiv Nadar tops Hurun India Philanthropy List 2023
Cross-border norms bring ePay companies directly under RBI watch
The RBI’s latest guidelines on cross-border payments are bound to push up compliance costs for fintechs operating in this sector. But with clarity comes the opportunity to attract more venture funding, say founders. On Tuesday, the central bank issued fresh operating guidelines for payment aggregators who want to offer payment services to importers and exporters.New set of rules:
- Fresh norms for KYC of merchants.
- Stringent net worth criteria have been laid out.
- All non-banks operating in this space need to mandatorily register with the Financial Intelligence Unit of India.
- Even existing payment aggregators need to get an explicit nod from RBI to continue cross-border payments
Who gets impacted? Almost every large payment fintech serves export and import merchants, hence they will be impacted. PayPal, which had exited the Indian domestic payments space to focus on cross-border remittance, is among the major global players that will be affected.
There’s also a bunch of early-stage startups that will now need to be separately regulated to continue operations.
The larger message: Through these rules, the clear message from the RBI is that if you are a fintech operating in a critical industry and at scale, you will be regulated directly. Interestingly, PayPal had vehemently argued in the Delhi High Court earlier this year that it was just a technology service provider and could not be forced to abide by bank level reporting norms by the RBI.
Also read | Temple and Panchayat payments go digital in next fintech wave
WhatsAppening? Telcos call out tech companies over business SMSes
The Cellular Operators’ Association of India (COAI) has written to the government accusing tech giants such as Microsoft and Amazon, of “presumably circumventing and bypassing the legal telecom route” to send enterprise messages to customers, causing a likely Rs 3,000-crore annual revenue loss to the central government and the service providers.Driving the news: “Renowned international corporates such as Amazon and Microsoft are presumably circumventing and bypassing the legal telecom route by disseminating messages to Indian customers via WhatsApp, Telegram,” read the letter to telecom secretary Neeraj Mittal. “This is not only an alleged gross violation of licensing and security norms but also a clear loss of revenue and forex earnings to the exchequer.”
What’s the issue? Technology majors, OTT platforms, financial institutions and ecommerce sites use international A2P (application to person) channels such as WhatsApp to reach out to customers for promotions and authentication through OTPs. The regulated SMS service by telcos is supposed to be used for such purposes.
By the numbers: A recent Frost and Sulivan report said the size of enterprise messaging for India’s telcos in FY23, was just shy of Rs 2,500 crore. Telcos stand to lose a chunk of this if enterprise messaging, relevant in the context of rapid expansion in digital payments and ecommerce volumes, moves to platforms such as WhatsApp.
Mamaearth parent’s IPO subscribed 7.61 times
Mamaearth cofounders Varun Alagh (left) and Ghazal Alagh
The initial public offering (IPO) of Honasa Consumer, the parent of personal care brand Mamaearth, closed on Thursday, with the issue getting subscribed 7.61 times, courtesy of a big push from qualified institutional buyers (QIBs) on the final day.
Details: QIBs put in bids for 11.5 times the shares reserved for the category. The retail portion was subscribed 1.35 times.
The company has reserved 75% of the issue size for QIBs and 15% for high-net-worth individuals, while 10% has been earmarked for retail investors. It has also kept shares worth Rs 1 crore for its employees, and that portion was subscribed 4.87 times.
About the IPO: The IPO comprises a fresh issue of shares worth Rs 365 crore and an offer for sale of up to Rs 1,336 crore by existing shareholders at a price band of Rs 308-324 a share.
Focus on listing: With an oversubscribed issue, the focus of the public offering has now moved to the company’s listing, which is expected to happen next week.
Quick recap: As some new-age companies haven’t fared well on the bourses, market participants were somewhat anxious about Honasa’s IPO. However, in an interview with ET earlier this week, cofounder and chief executive Varun Alagh said investors should avoid making a call on the company based on its short-term performance on the stock market.
Read our in-depth coverage of the Honasa Consumer IPO here:
Cyberattacks on healthcare sector rising, 60% of organisations hit: report
Amid a rising scare of cyberattacks on the country’s healthcare sector, a new study from cybersecurity firm Sophos revealed that nearly 60% of healthcare organisations in India have suffered a cyberattack in the past 12 months. Of these, cybercriminals were able to successfully encrypt data in nearly 75% of ransomware attacks.
Data decoded: The study, shared exclusively with ET, suggests that the figures denote the highest rate of encryption in the past three years and a significant increase from the 61% data encryptions carried out last year.
Further, only 24% of healthcare organisations were able to disrupt a ransomware attack before the attackers encrypted their data — down from 34% in 2022, and the lowest in the sector over the past three years.
Expert take: “To me, the percentage of organisations that successfully stop an attack before encryption is a strong indicator of security maturity. For the healthcare sector, however, this number is quite low — only 24%,” said Chester Wisniewski, director, global field CTO, Sophos.
Recent data breaches: Earlier this week, the Indian Council of Medical Research (ICMR) suffered a serious cyberattack, exposing the personally identifiable information (PII) of 81 crore Indians. This came after incident with AIIMS, which suffered a loss of 1.3TB data containing 40 million records in November 2022.
HCLTech founder Shiv Nadar tops Hurun Philanthropy List 2023
HCLTech founder Shiv Nadar
For the fifth consecutive year, HCLTech founder Shiv Nadar and family retained the top spot on the Edelgive Hurun India Philanthropy list 2023 with a donation of Rs 2,042 crore for the fiscal year 2022-23.
Leading the list: Former Wipro chairman Azim Premji and family came second with a donation of Rs 1,774 crore, followed by Reliance Industries chairman Mukesh Ambani and family, which donated Rs 376 crore.
Kumar Mangalam Birla and family bagged fourth place with Rs 287 crore, while Adani group boss Gautam Adani and family took the fifth spot at Rs 285 crore.
Interesting highlights
- The entry of Prashanth Prakash, founding partner of VC Accel Partners, and his wife Amitha Prashanth marks a new trend of the VC ecosystem joining the list.
- Zerodha’s Nikhil Kamath, at 37, was the youngest philanthropist with a donation of Rs 110 crore and Rohini Nilekani topped the women’s list with a donation of Rs 170 crore.
- Mumbai was the philanthropy capital of India, followed by New Delhi and Bengaluru.
Other Top Stories By Our Reporters
SAP SE board member and chief technology officer Juergen Mueller
Tech sector weighed down by geo-political strife: SAP CTO |
The geopolitical landscape amid the Ukraine war and the Israel-Palestine conflict has created instability for the tech sector and affected talent in the region, SAP SE board member and chief technology officer Juergen Mueller told ET in an interview. But the supply chain disruptions, however, would make several customers value tech solutions even more, he said.
Centre issues notice to Apple over attempted hacking: The government has sent a notice to Apple asking the tech giant to join a probe led by the Indian Computer Emergency Response Team (CERT-In) in the attempted hacking of opposition parliamentarians’ phones, a senior official said.
Sustainable packaging maker Fibmold raises $10 million: Fibmold, a startup focused on sustainable packaging, said it has raised $10 million in funding from Omnivore and Accel. It is currently developing eco-friendly, molded fibre packaging products that mimic the functionality of rigid plastics.
iPhone 17 may be developed in India from H2 2024, says Apple analyst: Apple’s contract manufacturers — Foxconn (Hon Hai), Pegatron, and now the Tata Group, which acquired the Wistron production lines for $135 million – are expected to start the introductory process as early as 2024, marking a significant milestone in Apple’s efforts in diversifying its supply chain.
Global Picks We Are Reading
■ Why are fewer women using AI than men? (BBC)
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■ The UN hired an AI company to untangle the Israeli-Palestinian crisis (Wired)
