MobiKwik has reshaped the UPI payments market with game-changing innovations like Pocket UPI

Mobikwik, a 15-year-old Gurgram-based fintech company, is transforming digital payments with innovations like Pocket UPI, a product that enables users to make UPI (Unified Payments Interface) transactions through their MobiKwik wallet rather than directly linking a bank account. “Since its launch in early 2024, MobiKwik has experienced a fivefold growth in wallet market share, highlighting the company’s ability to drive product adoption through innovation,” says its Co-founder and CFO, Upasana Taku. It currently holds a 24% market share, making it the largest wallet provider in India. For many Indians, multiple small transactions can lead to challenges, including a cluttered statement or an increased risk of fraud. “With Pocket UPI, users can load a small amount into their MobiKwik wallet and use it for transactions without exposing their main bank account.” Taku explains that it’s secure, convenient, and effectively addresses genuine concerns, particularly for middle-class and lower middle-class users. MobiKwik wallet users can also scan any QR code, regardless of the organisation it is associated with and make payments seamlessly. “This innovation underscores our dependence on product development, instead of substantial marketing expenditures,” she adds. All these have helped MobiKwik emerge as the Best Fintech in Payments in this year’s BT-KPMG study. Recently, MobiKwik’s IPO, valued at Rs 572 crore, garnered an overwhelming response from investors. On December 18, 2024, the stock was listed on the National Stock Exchange at Rs 440 over its issue price of Rs 279. MobiKwik has accomplished what many fintech start-ups strive for but seldom achieve: profitability. The company reported revenue of Rs 890 crore for FY24, a 59% increase compared to the previous year, alongside Rs 37 crore in Ebitda and Rs 15 crore in net profit. “This is our first full profitable financial year,” says a proud Taku. The company operates across three key segments: payments, savings, and credit. The company’s foundation, however, lies in its payments business, which facilitates transactions across physical stores, e-commerce platforms, and utility bill payments. Merchants pay MobiKwik a nominal fee (Merchant Discount Rate or MDR) for facilitating these transactions. “We’ve partnered with 100,000 e-commerce merchants and 3.7 million physical stores, which makes us a leader in wallet usage,” says Taku. “We hope that the introduction of MDR on UPI transactions gets industry acceptance soon, which will further expand our revenue stream,” she adds. Leveraging customer insights, MobiKwik provides investment options such as fixed deposits (FDs), digital gold, and direct MF plans. The platform aggregates FD rates from banks and NBFCs, allowing users to invest directly through its app. “Our app simplifies the process. Users don’t need to open a separate bank account. They can view interest rates, invest, and manage their savings—all in one place,” says the 45-year-old Taku. For the third segment, the fintech has partnered with banks and NBFCs to offer credit products tailored to user spending patterns. This includes personal loans for individuals and working capital loans for merchants. MobiKwik has expanded its merchant ecosystem by introducing a soundbox device for small businesses. The soundbox provides audio confirmation of payments and generates a monthly rental income for MobiKwik. The company intends to expand this offering further, targeting kirana stores and other micro-enterprises. MobiKwik is also planning to diversify its lending portfolio by expanding into secured products. To reduce reliance on personal loans, it is introducing a secured credit card for individuals who lack access to traditional credit cards; customers can earn interest income on FDs while enjoying the convenience of a credit card through this. For instance, users can invest an amount as low as `5,000 in an FD through the MobiKwik app. This card, which works on UPI and offers rewards, is particularly beneficial for those with limited or no credit history. It enables them to build a credit score without the usual barriers of prior credit history or complicated documentation. In terms of financials, the company’s payments services are profitable, with a 20% contribution margin in payments and 40% in the financial services business. The payments business serves as a low-cost acquisition channel for attracting high-quality users to whom the company can cross-sell. With its payments business growing rapidly, MobiKwik aims to strengthen its leadership position further. “We are at the cusp of transforming how India manages payments, savings, and credit. Our goal is to make every financial journey seamless and secure for users,” concludes Taku. @teena_kaushal

COMPANIES

NEWS

MobiKwik has reshaped the UPI payments market with game-changing innovations like Pocket UPI

MobiKwik has emerged as the Best Fintech in Payments as it transforms payments with innovations like Pocket UPI