Enabling Technologies

Interview With MobiKwik Founders, the $70B Market Opportunity in India


We had interviewed MobiKwik Founder and CEO Bipin Preet Singh in 2013. At that time he had said "Window of Upasana_1Opportunity is now". This time we spoke to Upasana Taku, Co-founder and Director at MobiKwik and a PayPal and Standford alum. She is also the Director & CEO of Zaakpay which is closely associated with Mobikwik.

LTP: How do you see the Indian mobile payments market evolving over the next five years?

Upasana: The mobile payments landscape in India is blistering. The use of mobile phones is ever increasing in the country with more than 70% of mobile phones shipped in the country operating on the Android platform. India has 800 million adults who are mobile device-literate and more than 250 million of them use the Internet. Furthermore, with the digital shift, goods and services purchases are going online, thereby bolstering the mobile payments industry in India. Services such as mobile top-ups, taxi booking, food ordering, booking hotels, etc. are going online. As a result, the mobile payments space is a $70 billion market opportunity today in India as per our estimates. Overall in the wallet market, we think that more than 50% of the transactions come through mobile top-ups and bill payments, 20% via travel, hotel, e-commerce, 15% through radio taxis and 10% through food ordering.

LTP: What according to you is the USP of MobiKwik? What do you think players operating in the industry will have to do differently to stay ahead of competition?

Upasana: One of MobiKwik’s biggest USP is its focus on merchant acceptance. We are now accepted at 50,000+ merchants. Big Bazaar, WH Smith, Snapdeal, all travel sites, cab aggregators, Cafe Coffee Day, Grofers, etc. are our customers. Furthermore, MobiKwik is creating an offline retail network of more than 100,000 merchants, which will serve both as points for cash loading into the wallet and for wallet payments acceptance. Customer convenience is another USP with the help of technology as well as the network. We have also come up with the cash pick up feature which essentially will provide our 17 million+ users (available for everyone soon) a new way to top up their wallet. The pickup facility allows anywhere from Rs. 1,000 to Rs. 10,000 to be added to the wallet in real time. The service literally brings banking/money services at the doorstep for many who prefer using this method for top-ups.

LTP: RBI has removed two-factor authentications for contactless proximity payments up to Rs. 2,000. Do you plan to use it to its advantage? Is NFC going to kick in now for POS?

Upasana: We are working on the best form factor for proximity payments. We currently enable proximity payments through SMS and OTP. But we are exploring several other methods. NFC is gaining momentum and is an interesting technology. So we will see in the future what is the best available technology to use for proximity payments. We are heavily focused on bringing payments to the physical stores. Its a huge problem to solve and make the transactions cashless.

LTP: How many mobile wallet subscribers do you have currently? How many of them transact in a given month?

Upasana: We have around 17 million mobile wallet subscribers and have achieved a $250 million annual GMV run rate based on the last few months. We plan to process $700 million GMV through our wallet platform in the financial year of 2015/16.

LTP: Are bill payments and recharges the biggest stream for MobiKwik Wallet currently? What percentage share of your wallet business comes from recharge/bill payments/money transfer/bill payments?

Upasana: We started in 2009 as a website for recharges. By 2012, we had DTH recharge, mobile recharges, etc. in place, and in principle, all of our GMV was recharges. In 2013, we got the wallet license and started integrating third-party merchants for our wallet in early 2014. At present, recharges contribute to only 50% or so while food and travel contributes to another 40% and bill payments contributes to 10%.

LTP: I was speaking at a conference in the Bay Area on faster and real-time payments. They were very surprised to hear that India has a real-time payment system (IMPS). Why are wallets not driving it to the core? What is the issue?

Upasana: In India, we don’t have proper infrastructure for bank led commerce transactions. There is no switch for net banking while NEFT and RTGS have had a switch for the last six-seven years. NPCI has done a great job with IMPS in terms of architecture. The NPCI dedicated switch is very strong (technically) and is a single integration to the backbone. However, they left it out to banks to define their user experience in the final leg (like how to generate MMID). This is where I guess it is facing a challenge. Each bank has a different interface; generating MMID is unknown to large number of users. All these have prevented IMPS to really take off in India.

LTP: You have applied for a payments bank license but without any banking partner. Are you open to banking partnerships in the future? What’s the strategy there?

Upasana: The eligibility criteria for payments bank license includes existing non-bank PPI issuers and other entities such as NBFCs, corporate BCs, mobile telephone companies, supermarket chains, companies, real sector cooperatives and public sector entities. We thought we had all the criteria met ourselves, and hence, did not scout for partners. We realized that this country needs a low-cost banking model; a model where it is easier and faster to acquire customers on the mobile than opening branches. Banks are not built to cater to that. Furthermore, branches are mostly set up in upscale places/urban areas and cannot service the lower middle class. So we are hoping to solve such problems using mobile as a channel.



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