MobiKwik has reapplied for payment aggregator licence to RBI, confirms co-founder Upasana Taku

Fintech major MobiKwik has reapplied for the licence after its application to operate Zaakpay, its payment gateway, got rejected by the Reserve Bank of India (RBI). The payment aggregator framework was introduced in March 2020, which mandates that only RBI-approved firms can offer payment services to merchants.

“We had put the original application last year during the second phase of COVID-19. One of the requirements of the application was that as of March 31 2021 existing payment aggregators, who are applying for the licence, should have a net worth of Rs 15 crore. As of March 31 last year our net worth was Rs 14.3 crore so we were short only by Rs 70 lakh and we were short only for about 10-15 days. This is because only after our board meeting in April we could infuse capital and raise the net worth of the company. So that was the problem. We were not complying with the requirement of the licence,” says Upasana Taku, co-founder, MobiKwik.

Business Today reported on April 21, 2022 that MobiKwik’s application to operate Zaakpay as a payment aggregator was rejected by the central bank.

Taku adds, “Interestingly enough in August, RBI came up with a new notification saying that existing payment aggregators, who were not able to meet requirement last year, but if they are meeting the requirement in March 2022 then they can apply for the licence. Because this year our net worth was much higher so we have reapplied and the application is under consideration."

Founded in 2009 by the husband-wife team of Bipin Preet Singh and Upasana Taku, MobiKwik introduced Zaakpay as its payment gateway in 2012 to enable websites and apps to collect payments from their users using multiple options, including debit and credit cards, mobile wallets, UPI and net banking. “We have been running this business for many years and it is a profitable company. We will continue to build the business until any communication,” says Taku.

The Gurugram-based firm has approval from India's market regulator for its Rs 1,900, which comprises a fresh issue of Rs 1500 crore and an Offer-for-Sale (OFS) of Rs 400 crore. The fintech’s business is divided into two segments comprising payments and financial services.

In its Draft Red Herring Prospectus, the company had stated: “While our consumer payments and BNPL segments significantly rely on Zaakpay’s services for processing payments within the MobiKwik ecosystem. In fiscals 2019, 2020 and 2021, our payment gateway costs to Zaakpay amounted to Rs 646.61 million, Rs 1,428.82 million and Rs 1,397.26 million, respectively. Accordingly, any disruption in the functioning of Zaakpay, even if caused due to factors completely external to us, can adversely affect the operations of our MobiKwik Wallet and BNPL products, including MobiKwik Zip, as well as our brand and reputation.”

Also read: Punjab National Bank, Union Bank of India hike FD interest rates ahead of Diwali festivities

Also read: RBI's 2013 playbook to rebuild FX reserves unlikely to work, say experts