Hitachi acquires Prizm Payments – one of India’s fast growing payment solutions provider

hitachi aquires prizm payments

Hitachi, the US$80+ billion Japanese engineering and electronics conglomerate has today announced that it has entered into an agreement with Prizm Payment Services Pvt Ltd., one of India’s fast growing payment solutions provider, relating to transfer of all the issued equity shares of  the company  from the shareholders, including Winvest Holdings (India) Private Limited, Sequoia Capital, Axis Bank and other minority shareholders. Prizm Payments is a leading provider of payment services using ATMs and POS systems to banks and financial institutions in India.

Given the exciting phase of growth that the Indian payments market (online, m-payment and the latest bitcoin, etc) is currently undergoing, this news strengthens the belief in the existence of much larger total addressable market size and entrance of bigger players in this space. Hitachi sees India as an important region in its global strategy and is stepping up development of the Hitachi Group’s Social Innovation Business in the country. Hitachi aims to grow revenues in India by nearly 3 times to US$3 billion by the fiscal year ending March 31, 2016, compared with the year that ended on March 31, 2012. Furthermore, in the information & telecommunication systems business, a fulcrum of the Social Innovation Business, Hitachi has set forth the growth strategy of expanding global businesses and strengthening service businesses in order to create a business portfolio with growth potential. It’ll be interesting to see if with this acquisition Hitachi’s Social Innovation Business group will look at disrupting the payments market by providing alternative, economical and easy to transact solutions to enable and empower more local and rural businesses.

prizm-paymentsLatest updates from Prism Payments shares that after six long years of founding the company and building it into a leading payments company in India, they are at a threshold where they would needed a strong financial and strategic partner to achieve exponential growth as well as expand into international markets. And in order to achieve this objectives they have reached an agreement with Hitachi whereby Prizm Payments will be acquired by Hitachi and will become a subsidiary of Hitachi.

Prizm Payments has had a long association with Hitachi over the last four years through one of their subsidiaries called Hitachi Omron Transaction Systems (HOTS), in bringing their Cash Deposit Machines (CDM) into the India market. Over time, this close business relationship had evolved into strategic discussions in early part of this year, and concluded yesterday.

Speaking on the acquisition, Mr. Loney Antony, Managing Director, Prizm Payment Service, said “By becoming a member of the Hitachi Group, we are excited to capture synergies from the combination of Prizm Payment Services’ robust customer base and know-how in India, and the Hitachi Group’s expertise in IT services for financial institutions built up in Japan and around the world as well as its advanced technological capabilities, including cash recycling ATMs. Being part of the larger Hitachi family provides a unique opportunity to expand our service offerings to customers not just in India but across the globe. Furthermore this deal provides the management team and employees tremendous potential for professional growth.”

Mohit Bhatnagar, Managing Director of Sequoia Capital, one of the investors in Prism Payments said “Sequoia Capital is delighted to have partnered with Prizm when it was just a dream in the eyes of its founders. Prizm’s stellar management team have executed on a unique business model to emerge as a leading payments company in India. We are excited to see Prizm move to the next phase of its journey along with a global leader like Hitachi. Prizm’s success will be an inspiration for the next wave of startups seeking to build large enduring companies.”

Many financial institutions in India are working to roll out various services, including mobile device-based payment services in near future and the number of ATMs and POS systems, which currently have a low penetration rate, are also increasing. ATMs in particular are estimated to nearly triple in number in 4 years from around 100,000 in 2012. In India, non-financial-institution service providers are expanding ATM outsourcing business, providing banks and financial institutions with comprehensive services, extending from deploying the ATMs as its own assets, managing the cash-in-transit services, to managing, monitoring and maintaining ATM operations.

With over 1000 employees and approximately INR 500crores in revenue (as of March 31, 2013), it is good to see another Indian startup success story scripted in under six years, following the recent redBus acquisition by Ibibo. Hopefully, we’ll see more!

Chandan Raj

Chandan Raj

CTO @YourStory. Apart from tech - learning and sharing about founders, innovators and changemakers psyche and natural systems evolution. Fellow @Sandbox_Network, Co-founder @Aashayein Foundation