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E-wallet service provider MobiKwik is looking at expanding into lending money and financial investments

Published 8 years ago on Apr 08, 2016 2 minutes Read

New Delhi-based MobiKwik was initially set up as a website where customers could create a wallet account, load money from either credit or debit cards or via net banking and then recharge prepaid cell phones. In 2013, it got a licence to run semi-closed wallet services and has tied up with online players such as eBay, BookMyShow, ShopClues, Jabong and Myntra. It is the only company that has tie-ups with offline retail merchants such as Dunkin’ Donuts, Café Coffee Day, Big Bazaar and Barista. Co-founder Bipin Chandra Singh clarifies that the company is not looking to get into the remittance business. “Smartphones provide the best user experience, and as the penetration increases gradually, they will become the de facto medium for making payments. I don’t see the assisted retail model of remittance lasting beyond five years.” 

However, the company is looking to get into new areas in the future, such as lending money and allowing consumers to use its smartphone app to make financial investments, traditionally the bastion of banks. Like most wallet service companies, MobiKwik seeks a commission from merchants. So, the merchant has to pay 1.5-2% of the value of transactions and Rs.5-10 per transaction on utility payments. MobiKwik currently has 25 million wallet account holders and is adding 2 million-3 million new accounts or users every month. It has also tied up with more than 50,000 merchants and is doing half a million transactions every day. The company has a current GMV of $450 million and is targeting $1 billion within the next six months. 

From March this year, the company is looking to offer instant loans ranging from Rs.500 to Rs.5,000 to its users (the amount needs to be repaid within 14 to 30 days, along with a fixed charge). MobiKwik has tied up with three private banks and one NBFC for the same. The creditworthiness of the customers will be determined by their spending patterns and online payments. Over the next two to three years, MobiKwik aims to facilitate over $5 billion in payments by adding 150 million users and 500,000 retailers. With both data and smartphones getting cheaper, it is estimated that there will be 500 million internet users by 2018. Of this, the company believes it can net 100 million wallet account holders, which is also why Singh is hopeful of achieving break-even in the next 12-18 months.