Competition in employee benefit and incentive segment expect to intensify in India

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Indian employee benefit service segment has been quite dynamic in recent times. Reserve Bank of India issued draft guidelines wherein it has been stated that paper meal vouchers will be taken out from the system and only issued in digital format by end of 2017. During the beginning of 2nd quarter of 2017, Paytm launched Food Wallet that can be used to provide food allowance to employees under government approved tax redemption bracket. Similarly, employee benefits service provider Zeta partnered with card network RuPay to launch Zeta Super Card, a prepaid card service for employees. It enables employees to make payments at 12 lakh RuPay enabled POS terminals.

Meal vouchers and employee Services Company Sodexo has partnered with mobile Point of Sale (mPOS) solution provider and merchant acquiring company Mswipe to allow acceptance of Sedexo meal cards at Mswipe retail outlets including grocery stores, restaurants, cafes and food delivery services. Under this agreement, over 30,000 merchants will be able to use Soxedo meal cards and the services will be deployed from June 2017. A software patch is integrated at the back of Sodexo meal card that separates it from regular cards. There is a revenue sharing clause as well which states that Mswipe will earn a portion when this meal card is used at merchant location.

Soxedo has dominated Indian meal benefit segment for 20 years and it launched its digital meal benefit card in 2016. Currently, around 60% of its business is in digital form. Soxedo is presently accepted at 15,000 locations within India across 1,500 cities. It runs its very own proprietary acceptance network with 30,000 separate POSterminals issued to merchants across 700 cities. It has 3 million recognized customers on a daily basis.

Sodexo earns revenue in terms of marketing fee charged to customers. The fee depends on the category and volume of transactions of the merchants. It has chosen not to collaborate with international payment platforms such as MasterCard and Visa for regulatory reasons and to ensure that the meal card is exclusively used for food and non-alcoholic beverage purchases. Presently, it is looking forward to expand into tier 3 and 4 towns and cities. On other hand, Mswipe has a merchant base of 200,000 across 500 cities and stated that it is adding new 15,000 merchants every month to its client base.

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