In the U.S., Calpian, among other things, is a leader in a portion of the electronic payments industry known as merchant acquiring. Specifically, Calpian purchases recurring monthly income streams derived from credit card processing fees paid by U.S. retail merchants. Small and medium size businesses typically buy credit card processing services from ISOs (Independent Sales Organizations) that in turn work with one or more credit card processors. Calpian buys residual portfolios from ISOs that originated the contracts with merchants. Calpian also acquires ISOs who maintain sales forces to engage merchants directly and arrange credit and debit card processing services from processors.
In addition, Calpian has a growing financial position in India’s Money on Mobile service (MoM), a mobile payment processing service in India. It is believed to be the largest store network for mobile phone based transactions providing mobile top-up and DTH (Direct To Home) recharge services in India. MoM has identified two potential revenue streams. Its business model generates revenue from phone and TV bulk buying discounts (a proven current source of revenue), and consumer fees (3% per transaction) applied to transactions not involving purchase of a service.
First is via business-to-business (B2B) activity, consisting of the reselling of prepaid phone and prepaid TV time to retailers who then resell that time to consumers. This activity is currently operational and generating revenues.
The second way MoM plans to generate revenue is to empower consumers to use their cell phones to make payments directly to vendors and other consumers. Such direct person-to-person transfer payments are known as domestic remittances. According to BankNetIndia, the total transaction value of domestic remittance in India stood at $13.0 billion in 2010 with 80% of domestic remittance directed towards rural areas. This overall market is expected to reach about $20.3 billion by 2014, growing at a compound annual growth rate of 12%.
For additional information, visit www.Calpian.com
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