MobiKwik, one of the leading player in the digital wallets space in India, has decided to shift its focus. The major reason is the growing competition in the market, as well as the threat from the newly introduced Unified Payment Interface (UPI) and government’s own BHIM payments app.
As per the report from Economic Times, MobiKwik is now shifting its focus from pure digital wallet play to payment gateways. With an offering of payment gateway service, digital payments can flow through their network and the company can charge merchants for that, adding a new revenue stream for the company.
For this, Zaakpay, an online payment gateway aggregator which is being promoted by MobiKwik, is getting hived off as a wholly-owned subsidiary of One MobiKwik Systems, the parent company of MobiKwik wallet. The new division will have a separate business head and a dedicated engineering team.
Bipin Preet Singh, chief executive officer of MobiKwik, said,
We had launched Zaakpay way back but then there was too much of pricing pressure in the market, now with the consolidation happening in this space, we are going full throttle on expanding the Zaakpay business. It has been a profitable business for us as well.
He further added that the company has more than 90% success rate on card payments through their gateway, which has been one of the biggest positive points of the business. He also said that they’ve been able to achieve that feat through deep level integration with card network Visa.
A couple of months ago, the company said that it is going to invest nearly $45 million this year in order to expand its user base on the platform. It is also aiming to rack up $10 billion worth of transactions on the platform.
Founded in 2009 by Upasana Taku and Bipin Singh, MobiKwik has so far raised around $126.85 million in 6 funding rounds from about 9 investors. The most recent funding round being worth $40 million in August last year from South Africa’s Net1.
With a surprising surge in digital transactions, the payment gateway space has been witnessing major consolidations over the past year. Payment gateway startup Citrus Pay was acquired by PayU, while Ingenico acquired TechProcess, and CCAvenue – one of the leading player in the segment, got merged with Infibeam.