In fresh funding news land, Snapdeal isn’t the lone shark to receive a hefty sum of money today. Gurgaon-based digital wallet platform MobiKwik has received a fresh $40 million strategic investment from South Africa-based mobile payment solution provider Net1.

Under the technology agreement, Mobikwik will integrate Net1’s mobile virtual card(MVC) technology into its own mobile wallet to give its over 100,000 merchants access to a wider selection of payment methods. The MVC solution utilizes the existing plastic money to generate one-time-use virtual offline cards using your mobile phone. This essentially makes use of the existing technology and infrastructure to provide hassle-free access to money, while also eliminating the risk of theft, phishing, spoofing, etc.

Being one of the experienced mobile solutions out there, Net1 specializes in providing secure and affordable transaction channels across emerging economies. It is also listed on both the NASDAQ as well as the Johannesberg stock exchange and has a staggering valuation of around $480 million.

This funding round is an indicator of foreign investors’ surging interest in India’s mobile-only future. There are several similarities between India and South Africa though, including highly regulated markets, limited infrastructure and large unbanked populations. Thus, Net1 is also keen to partner with MobiKwik to expand its digital payment services to one of the fastest-growing countries, India, which has a sky-rocketing smartphone and Internet adoption rate. Commenting on the same, Serge Belamant, chairman and chief executive officer, Net1, said,

Our strategic investment in MobiKwik provides us with meaningful participation in one of the largest and fastest growing digital payment markets globally. We are excited to partner with one of India’s most utilized and recognized digital platforms, through which we can introduce our products and services. This investment will accelerate our ability to build scale in India.

With the freshly infused money, MobiKwik is now looking to expand its userbase from the current 32 million to the north of 150 million in the coming three years. With the introduction of various technologies, the company is looking to enhance its value proposition and differentiation to users and merchants alike. It is also looking to scale up its merchant base to about half a million.

Commenting on the same, Upasana Taku, the co-founder of MobiKwik said,

We greatly value our partnership with Net1 and look forward to learning from their best practices in serving the un-banked and under-banked users, while taking progressive steps towards making India a cashless economy.

Our pioneering innovations in the fintech industry have helped us maintain this lead position, and with support from strategic partners such as Net1, we look forward to further strengthening our product offering and realize our vision to let users save, borrow, pay and invest using MobiKwik.

With expansion on mind, the company is also looking to double the gross merchandise value of offline transaction to 50 per cent by next year. MobiKwik is, thus, debuting two new offline payment technologies based on app-generated PIN and quick response(QR) code. To increase exposure, it is also looking to target both more organized retail partnerships and unorganized retail tie-ups in the near future.

Using the PIN service, the users will now be able to pay at partner stores and retailers without Internet. The cashier will just need to enter an eight digit pin, generated by mobile app, to input along with the billing amount. Viola! User gets a message and the payment is made. While scanable QR code will be used at unorganized retails shops lacking the required Point-of-Sale systems and billing infrastructure.

With Net1’s expertise and track record in facilitating financial inclusion across Africa, our strategic relationship with MobiKwik marks an important milestone from which we can leverage India’s substantial efforts to drive financial inclusion, down to the grassroots in rural and deep rural areas.

adds Belamant.

MobiKwik was founded by Bipin Preet Singh and Upasana Taku in 2009. Prior to this round of funding, MobiKwik had secured $50 million in a series C round of funding led by Japan’s GMO Payment Gateway and Taiwan’s Mediatek in May 2016. The company, till date, has managed to add a total of about $128 million to its coffers. It is also up against some pretty serious competitors in the form of Alibaba-backed Paytm and Snapdeal-owned FreeCharge.

According to a recent Google-BCG study, the size of India’s digital payments industry will reach $500 billion by 2020, representing a ten-fold increase from current levels. The report predicts that more than 50% of India’s internet users are expected to use digital payments by 2020.

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