Mobikwik’s Full Service FinTech Platform Bet: Will it be a Winner?

Abstract

MobiKwik was founded in 2009 by Bipin Preet Singh with Upasana Taku joining as a co-founder in early 2010. Launched as an online store for mobile recharges it later added DTH, data cards, and eventually bill payments by end of 2012. One of the unique features of the platform was - MobiKwik Balance, an e-wallet (an online prepaid payment instrument or PPI) where customers could load money and then use it to recharge mobile phones. By the end of 2013, MobiKwik had obtained a license from the Reserve Bank of India (RBI) to convert its closed wallet (MobiKwik Balance) into a semi-closed wallet whereby it could now onboard third-party merchants to accept payments via MobiKwik wallet. Following the failure to get a payment bank license from the RBI in 2015, the company shifted its focus to a Fintech play by looking to offer short-term loans through tie-ups with non-banking financial corporations (NBFCs). However, the events of 8th Nov 2016 (demonetization) changed the dynamics and brought the focus back on payments. Though MobiKwik saw rapid growth in transactions following demonetization, there were several new challenges as well such as launch of the Unified Payment Interface (UPI) by NPCI which competed directly with wallets and announcement of stricter Know Your Customer (KYC) norms for wallets by the RBI. Since the beginning of 2017, MobiKwik has focused on becoming a full-stack fintech player offering payments, investments, loans, and insurance products to the unbanked population segments. The company has been helped in its endeavors by Bajaj Finance which took a strategic stake in the company. Though MobiKwik was an early starter in the wallet space and was one of the few independent wallet companies left with several firsts to its credit, it has been left far behind by Paytm which was now a leader in this space with ambitions to be a full stack fintech player. Can MobiKwik successfully navigate the Paytm challenge as well as surmount the regulatory issues? What strategic path should its founders pursue to win the great Indian fintech race?