Vodafone M-Pesa applies for license extension
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Mobile payments company Vodafone M-Pesa has applied for an extension on its prepaid payment instrument license while it explores merging with an associate or third party company.
Vodafone M-Pesa, which is wholly owned by India’s Vodafone Idea, is seeking an additional extension of its license from the Reserve Bank of India.
The company will be required to pursue a merger due to regulations preventing one entity from having a payments banking business and prepaid payments business under separate entities.
Due to the merger between Vodafone India and Idea Cellular, the combined Vodafone Idea currently has a 100% stake in Vodafone M-Pesa as well as a 49% shareholding in the Aditya Birla Idea Payments Bank Limited.
The company has already negotiated multiple extensions to its prepaid payment instruments, but only on a temporary basis as the company pursues a solution to gain compliance with the regulations.
Questions & Answers
Q.Why does Vodafone M-Pesa need to merge with another company?
Why does Vodafone M-Pesa need to merge with another company?
Regulations prohibit a single entity from operating both a payments banking business and a prepaid payments business under separate entities. Vodafone Idea holds stakes in both Vodafone M-Pesa and Aditya Birla Idea Payments Bank Limited.
Q.Which regulatory body grants Vodafone M-Pesa its license extensions?
Which regulatory body grants Vodafone M-Pesa its license extensions?
The Reserve Bank of India is the body from which Vodafone M-Pesa is seeking an additional extension for its prepaid payment instrument license. They have granted previous temporary extensions.
Q.Who currently owns Vodafone M-Pesa?
Who currently owns Vodafone M-Pesa?
Vodafone M-Pesa is currently 100% owned by Vodafone Idea. This ownership structure resulted from the merger between Vodafone India and Idea Cellular.
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