In an interview with ET, MobiKwik co-founder Upasana Taku discusses growth of the business, partnerships, opportunities and more. Edited excerpts:
Economic Times (ET): Cash backs have been key to growth of digital payments. Many users tend to switch from one platform to another to avail of cash backs. What impact do you see when cash backs go away?
Upasana Taku (UT): Payments competition has been intense and the market was flooded with loads of cashbacks and discount offers at one time. All the players have now realized that a cash-back driven user acquisition strategy is not sustainable and the marginal impact is currently quite low. This is evident in the fact that there are little to no cashbacks available in the market now.
Our strategy at MobiKwik has been quite different – organic conversions and rewards through Supercash. SuperCash is a loyalty based program to ensure that you get a discount on each transaction. SuperCash works on the same lines as cashback, only difference being it gives you 5% discount on every transaction.
A user can add SuperCash with help of coupon codes on redeem voucher page. In one transaction, you can either earn new SuperCash or use existing SuperCash.
Our core strategy over time to build customer loyalty is to replace cashbacks with MobiKwik credit! With this, the user can make a higher ticket purchase, the merchant sees higher revenues and MobiKwik can earn better payment and credit margins on each transaction.
ET: MobiKwik has entered into a few partnerships to offer sachet type financial products. What has been the consumer response to such offerings?
UT: Insurance penetration in India is around 3.7% of the GDP. This presents a vast opportunity for digital Insurance to the mass market which has been ignored by banks, distributors and even online companies owing to high distribution cost. Our endeavor has been to reach out to the real Bharat/underserved with our insurance offerings that can be bought on a tap of a phone.
We have forged partnerships with insurance companies like SBI General Insurance, ICICI Lombard, Aegon Religare, Max Bupa, Cholamandalam to name a few to launch various bite sized insurance products across categories such as personal accident insurance, cyber insurance, dengue cover, hospitalisation and more.
ET: Bajaj Finance is an investor in MobiKwik. How do you complement each other?
UT: Our partnership with Bajaj Finance was a strategic partnership to offer a unique product to consumers – through this partnership we have introduced debit and credit wallet. With this partnership, we will empower consumers to avail credit facility through the wallet enabling them with instant purchases and payment option. This strategic tie-up, extensively uses “mobile first” technology to offer credit to consumers and millennials who are fuelling a growing demand of digital payment transactions.
ET: RBI recently slapped a fine of Rs 15 lakh on MobiKwik for non-compliance with regulatory guidelines. Comments
UT: The penalty was for procedural non-compliance owing to a technical issue. It was observed more than a year ago when changes in the procedural norms were being implemented. We have taken the necessary steps and corrective actions to remediate the issue and intimated RBI about the same.
ET: Have you seen a demand slump for financial products as witnessed in other sectors including auto and real estate?
UT: As far as our offerings are concerned, we have not seen a demand slump. The reason is simple, our products have been crafted in a way that they don’t burn a hole in the pocket but provide access to the needs and desires of an individual. So the purpose behind providing accessible financial products to our customers is that they can purchase these regardless of the economic slowdown, while ease of affordability on a single click makes it attractive for our users all the time. Being financially prudent or sound also helps them improve their credit bureau score in the long run which is a win-win for both of us.
You may be aware that we currently have about 110 million users in India, our aim is to also continue growing our payments platform to reach 250 million users and aspire that our overall financial products reach at least 30% of that base at any given point in time.
ET: Are you looking at any acquisitions? If so, in which space?
UT: We acquired Clearfunds, a mutual fund investment platform last year to complete our fintech platform offering that covers payments, credit, insurance and investments. We are always on the lookout for strategic investments or acquisitions that can add value to our business.
ET: Are you looking for a buyer for your payment gateway? Are you in talks with PayU?
UT: We deny that we are in discussion to sell out our payment gateway business. We continue to sustain rapid growth and have diversified into financial services. Our key shareholders, including Bajaj Finance, Net1, and Sequoia, are supportive of MobiKwik’s strategy and success. MobiKwik and our payment gateway Zaakpay are in fact fund raising.
ET: If you get a buyer will you be willing to exit/sell out at this point?
UT: Our aspiration is to be the first Indian payments company to get listed in India or overseas. Over the next few years, we will continue to grow our payments platform to reach 250 million Indians and our financial products will reach at least 30% of our users. We will launch more products in all financial services catering to the diverse needs of users and merchants. We will also geographically expand in multiple South Asian countries. This year we have crossed the first hurdle of hitting cash flow positive in August 2019. We will double down on our fintech scaleup in 2020 to make FY2021 our first full year of profitable growth. Once we hit this milestone, we will march forward towards an IPO in 2022-24.
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