Oxigen To Raise $100 Million, Plans Mega Expansion

Oxigen Services, one of country’s leading payment service providers is planning to increase its reach in the online as well as offline space. At present, the company has a total of 150 million subscribers from all channels, and plans to take it to 300-400 million in the next 5 years.

However, the main focus of the company will remain to be profitable.

Sunil Kulkarni, Joint managing director of Oxigen said, “We are not chasing subscriber volume. We will grow about 300-400 million for the next 5 years, but our main focus will remain monetisation, transaction revenue, rather than subscriber acquisition.”

Kulkarni added that it will increase its Super PoS (point of sale) terminal from 5,000 to 75,000 this calendar year.

The company introduces Super PoS terminal in 2015 that allowed customers to transact through a bank account and make bill payments. It also acts a mini ATM and was in high demand during the currency exchange phase post the announcement of demonetisation.

The company, which is majority-owned by South Africa’s Blue Label Telecoms will raise $100 million this calendar year to support the expansion plans.

Another new things which will come from Oxigen is its One India Quick Response(QR) code. Kulkarni claims the that it will eliminate the inconvenience of putting 20 sticker.

He said, “How many stickers you can stick in a shop? One India QR code will allow merchants to accept payments from Oxigen as well as Visa, MasterCard and Rupay users. It brings convenience to merchants in terms of settlement and acceptance.”

When asked about increase in online transaction post demonetisation, Kulkarni said that Initial reaction was to reach out to payment providers like Paytm, Freecharge, Oxigen and other players. So, online transaction has increased multiple times.

However, he said the company will not indulge in any discounting or cash back policy. Oxigen has been a profitable company for the last 4-5 years.

“There is no stickiness of an Indian customer based on cash back. Today one wallet customer gives cash back, he uses that, the second one gives, he uses that and so on.. Customer acquisition at the cost of cash back is not a model we would like to pursue. We may give some amount of benefit for first time acquisition,” said Kulkarni.

Online wallet service providers in the country have been burning cash to increase its customers bases by giving cash backs. While Alibaba backed Paytm, posted a net loss of Rs 1,548 crore in FY 2015-16 on revenue of Rs 830 crore, Gurgaon based MobiKwik reported a net loss of Rs 41.5 crore in FY 2014-15.