India’s mobile payments firm MobiKwik reaches a key milestone

MobiKwik's Co-founder Bipin Singh

India has become well versed in the latest technologies. Now, Indian mobile payments firm MobiKwik has reached a rare milestone that its rivals could hardly imagine. The Gurgaon-based firm claimed on Tuesday that it is getting profits now excluding all the interests and taxes. The co-founder and CEO of MobiKwik, Bipin Singh said, “We are in a system where we have observed many changes in the payment domain. However, we have realized that only payments aren’t going to be a reliable business.” Therefore, to get all the profits, MobiKwik made several changes to its business. It stopped taking part in the race of aggressively acquiring users. It also stopped fighting with Paytm. This fight was quite a hot topic back in 2017.

Paytm remains quite unprofitable. Moreover, an analysis of the company shows that its conditions won’t change soon. On the other hand, Google also has a payment service in India that has no shortage of money. Until today, MobiKwik has raised $118 million from investors like American Express, Sequoia Capital, Cisco investments and others. This amount is more than that raised by India’s social media platform, ShareChat.

The COO and co-founder of MobiKwik, Upasana Taku, said that the company is inspired by ICICI and Kotak banks. Both of these have around 15 to 20 million customers. They also have some digital payment apps that are profitable. Taku also said that MobiKwik has around 400 employees and 110 million users.

In the previous two years, the company has cut down on cashbacks it gives to its users. However, many companies in India have used this strategy to offer payments solution. MobiKwik has focused more on developing a wallet app to manage its customers and find out additional revenue sources.

The company is focusing more on its mobile wallet and payment business that accounts for 75% of its overall revenue. However, its practice of giving credit cards and insurance to customers is already generating revenue.

This isn’t surprising because India remains underserved. There are less than 50 million credit cards in circulation and getting a big loan remains a challenge for lower-income people. “Money is a big problem in India. Even people having smartphones and internet data don’t have access to credit cards. We considered it as a great opportunity for our payment app. We started paying those users who have the discipline to repay the money and have some income,” the couple said, who are now also becoming angel investors.

MobiKwik is working with other lenders and banks to provide loans between $69 and $1,380. Since it started offering these loans 18 months ago, the company has distributed $100 million and given 800,000 loans.

In 2018, the company offered “sachet-sized” insurance plans to give protection from fire accidents and hospitalization. These plans start from 28 cents and thousands of users buy them every day. The company also allows users to get funds for as little as $1.30.

The company’s overall revenue will hit $69 million until March next year, which is up from $28 million. Taku said that the company wants to become fully profitable by 2021 and plans to go public after five years.

MobiKwik is competing with many other companies that are providing financial aid services, like loans. These loans don’t require a support staff or salesperson. Therefore, it becomes quite easy for banks to target people who are weak financially.

Upasana Taku and Bipin Preet Singh founded MobiKwik, a decade ago. They studied at IT Delhi University and saw a great opportunity to improve mobile recharge options. Preet Singh started the company with $250,000. He also developed the website and payment options. After that, he rented an office in Delhi. Initially, it was a website with closed wallet services. However, later the company extended its services to mobile apps. The company also collaborated with online merchants to reach e-commerce sites.

MobiKwik will reach newer heights in the future because statistics show that the retail credit card demand in India is going to grow 60% in the coming years.

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