Money & Banking
Emerging markets, including India, will drive innovation in payments industry: PwC
The payments landscape in emerging markets, including India, is expected to transform in the wake of accelerating growth in electronic payments with advent of new and disruptive market players and alternative business models, a PwC report said.
"The growth of economic power within the emerging markets and their potential to leapfrog developments in mature markets will aid the creation of a state-of-the-art payments ecosystem,” multinational accounting firm PricewaterhouseCoopers said in its report. 
'Emerging Markets - Driving the Payments Transformation' examines the dynamic nature of emerging markets, especially payments, which creates challenges that have never confronted the developed world, but also opens up opportunities for innovation and growth.
"Given the underlying infrastructural issues in emerging markets, there needs to be a focus on developing the infrastructure both for issuing and acceptance of payments products and instruments. Alternate payment instruments and modes like mobile wallets, virtual cards and accounts, social media and contactless payments are gaining traction for specific use cases, especially the unbanked customer base, driven by technology, customer needs and declining margin,” said Vivek Belgavi, FinTech Leader, PwC India.
In India, the new payments banks (who cannot lend but can borrow up to a limit) are expected to start operations in 2016. Since their focus will be solely on transactions, they will look at providing seamless transaction options for payments of utility bills, mobile bills, and school or college fees, either electronically or through the banking touch points they create. 
At the core of this change will be technology, which in addition to maintaining current standards of reliability, is expected to also reduce transaction times, improve security, increase acceptance channels (especially physical), and - in the case of merchants - lower transaction costs, it said.
"Given the large unbanked population and the growing regulatory agenda to engage these people into the financial system, emerging markets are in a unique position to drive growth in the payments industry," said Hugh Harley, financial services leader for emerging markets, PwC.
The report said that the payments ecosystem will also be redefined by regulatory interventions, to balance the disruption of alternative payment service providers with the reliability of traditional players. 
Noting 85 per cent of the global population resides in emerging markets, it said that customer expectations are driving the change in payments industry in these markets. 
"Nearly 90 per cent of people under 30, which account for 75 per cent of the online transactions, reside within the emerging markets. This is favouring the growth of online transactions, which is in turn curtailing the black economy and stimulating economic growth."
It said though literacy rates and urbanisation are on the rise, access to basic financial services poses a major challenge in these emerging markets, and in response, there has been a rapid expansion of new economically viable technologies and innovations like e-banking and mobile money. 
With regulators in emerging markets realising the huge costs, risks and inefficiencies associated with cash transactions and recognising importance of electronic payment methods in promoting access to formal credit and savings instruments, drastic measures like introducing differentiated banking licenses, tax benefits on electronic payments, awareness campaigns are being taken to build a sustainable electronic payments ecosystem, it said. Many governments have opened their markets to non-bank players aimed at furthering financial inclusion, it added.
With the proliferation of smartphones and tablets, which are serving as a convenient, cash free and card-free financial transaction medium, emerging markets are driving the growth in e-commerce spending, and there is a rapid development of new payment concepts based on mobile infrastructure initiated by the online retailers. 
“Banking on high customer adoption of these models, this has the potential to displace traditional cash with other electronic modes of payments,” it said.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.



Jaiprakash Power sells its Bina unit to JSW Energy at 22% discount
Sajjan Jindal-promoted JSW Energy has agreed to acquire 100% stake in the debt laden Jaiprakash Power Venture’s 500MW Bina Thermal Power plant (2x250 MW) based at Sagar in Madhya Pradesh. The deal is expected to be finalised by May 2017, which may get extended subject to delay in getting regulatory approvals.
The project cost of the Bina power plant is about Rs3,470 crore. However, JSW Energy has managed to acquire it at around 22% discount. "While the relevant issues related to offtake and declining merchant prices still exists, we believe that JSW Energy’s acquisition cost at a steep discount, at Rs2,700 crore against  project cost of Rs3,470 crore, could provide high returns in case of improved plant load factor (PLF) going ahead," says Emkay Global Financial Services Ltd in a report.
The project has 70% power purchase agreement (PPA) with Madhya Pradesh Discom (65% at regulated basis and 5% at variable cost). Balance 30% is exposed to merchant market. The fixed cost for the project comes to about Rs2.34 per unit. As per the PPA terms, the project is entitled to recover the fixed cost on the availability of 80%.
According to Emkay report, the project historically has been operating at subdued PLF of about 35%-50% over FY14-FY16 and during first quarter of 1FY17 the PLF was around 6%. The subdued performance was primarily due to back down by state discoms. This has impacted the project profitability.
JSW Energy plans to fund the acquisition through 75:25 debt to equity (D/E) ratio. "Thus, assuming 80% PAF and Nil merchant sales, the return on equity (RoE) for the entire project works out to be 16.7% and any merchant realisation above variable cost will lead to incremental RoE," the research note says.
Emkay finds the deal positive for JSW Energy, however, it says till the finalisation of appointed date, the impact of the deal cannot be factored in to its financials at present. "The fixed cost of Bina Project for JSW Energy will be significantly lower than the normative fixed cost for tariff calculation and ex RoE, due to its lower acquisition cost and debt restructuring. Calculation of variable cost is not relevant due to the PLF as which the plant operates," it concluded.
Earlier in November 2014, JSW Energy acquired two hydropower plants, the 300 MW Baspa-II and the 1,091 MW Karcham Wangtoo projects, both in Himachal Pradesh for Rs9,700 crore from Jaiprakash Power Ventures.



Dr Anantha K Ramdas

10 months ago

Sajjan Jindal first of all needs to reward the share holders of Jindal steel and Power Ltd which has a huge cash reserve; except for regular dividends, can he or Sesha Giri Rao say how they (jspl) has rewarded the shareholders in the last ten years?


Nimish Unadkat

In Reply to Dr Anantha K Ramdas 10 months ago

JSPL is controlled by Navin Jindal and not Sajjan Jindal. JSW Steel is controlled by Sajjan Jindal

Foreign student enrolment in Indian varsities drops 6% over 2 years
About 200,000 Indian students stream out of the country seeking a foreign education, but no more than 31,126 foreign students sought an Indian education in 2013-14, according to ministry of human resource development data quoted in the Times of India. This means the enrolment of foreign students in India declined by 2,030, or 6%, over two years, according to government and United Nations data in a 2014 report.
However, the Times of India said the number of foreign students had risen by 11,000, although it was not clear over what period.
About five million students -- almost double the 2.1 million in 2000 -- studied outside their home countries in 2014. Of these, two million were “engaged in language travel”, of which two-thirds sought fluency in English, said a 2015 report from ICEF, a global marketing consultant, explaining how higher education, once accessible to a global elite, is now particularly open to the burgeoning middle classes on every continent.
“The governments of the fastest-growing emerging economies are investing heavily in the expansion of their higher education systems; creating scholarships to help their students acquire education abroad-and then bring it back home; and joining in cross-border research partnerships and exchanges that elevate their countries’ status, potential for innovation, and influence in the world,” the ICEF report said. “It is no coincidence that as a result, developing economies are growing in tandem with international student mobility. And as the balance of world economic and political power shifts, so do patterns of mobility.”
China, India, and South Korea are the world’s leading sources of international students, the report said. One of every six internationally mobile students is now from China. Together, China, India, and South Korea account for more than a quarter of all students studying outside their countries.
By 2025, India will have the world’s largest number of 18- to 22-year-olds seeking higher education, 119 million, an increase of 3.9 million from 2012, while China will have the second largest, 80 million, a decline of about 35 million from 2012, according to this 2016 British Council report, The Shape of International Education to 2025.
India’s disadvantage as a magnet for the millions of students seeking an education outside their countries is the lack of higher education institutes of global quality. There is no Indian university in the list of top 200 universities listed in the Times Higher Education World University Rankings, published by a British newspaper. The only Indian institution ranked in the top 300 was the Indian Institute of Science (IISc), placed in the 251 to 300 band (beyond 200, institutions are only banded together).
The number of foreign students in IISc was 1%, compared to 27% in the California Institute of Technology, or Caltech, the world’s top-ranked institution, as IndiaSpend reported on July 13, 2016.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


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