Mumbai: Gurgaon-based One MobiKwik Systems Pvt. Ltd, which owns and operates the virtual wallet MobiKwik, is increasing its focus on offline payments, in a bid to increase adoption and target higher wallet transactions amid stiff competition.
Currently, offline transactions contribute 25% of Mobikwik’s gross merchandise value. The aim is to increase this to 50% over the next one year, said co-founder Upasana Taku.
In order to increase its offline footprint, MobiKwik is piloting two payment technologies–based on app-generated PIN (personal identity number) and quick response (QR) code.
Additionally, the company is targeting both more organized retail partnerships and unorganized retail tie-ups that includes small mom-and-pop shops.
Founded in 2009 by Bipin Preet Singh and Taku, MobiKwik has offline partnership with Future Group’s retail chain BigBazaar and shopping mall Central and Global Healthline’s pharmacy chain 98.4, among others.
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While MobiKwik-based transactions have grown to 5-10% of BigBazaar’s non-cash segment since they tied up in July 2015, it reached 30-40% of payments at Central malls in June 2016, owing to cashback schemes, with an average transaction size of Rs.2,000-3,000, said Singh.
Currently, MobiKwik has over 25,000 such offline partnerships across India, which the company aims to increase by 400% in the next one year, said Taku.
The wallet company is now piloting PIN-based offline transactions, which will enable payments without being connected to the internet.
MobiKwik’s mobile application generates an eight-digit pin that the cashier needs to input along with the billing amount. The user gets a text message notifying him/her of the payment. The wallet gets updated once the user has connected to the internet.
Apart from retail outlets, usecase of the pin-based offline transactions include paying for parking in basements, an alternative to prepaid cards used at the food court in shopping malls, among others.
For the unorganized segment, the company first plans to pilot the technology in Gurgaon in the next few months. The unorganized sector usually lacks point-of-sale systems and billing infrastructure, so MobiKwik plans to implement a quick response (QR) code in addition to the eight-digit pin technology for payments, said Singh.
A QR code is a mobile-phone readable barcode that can store any kind of alphanumeric data.
MobiKwik clocks an average of 15 million monthly transactions amounting to an average of Rs.70 crore, said Singh. The company currently has a total user base of 32 million, with two million daily active users; each active user would make six to eight transactions on a monthly basis.
“We are growing at the rate of 250% year-on-year and hope to register at least this same growth next year also,” added Taku.
Mobikwik’s last funding round in May was led by Japan’s payment gateway GMO and Taiwan’s semiconductor company MediaTek. The company, which has raised close to $40 million, is also backed by Sequoia Capital, American Express, Cisco Investments and Tree Line Asia.
Apart from Paytm (One97 Communications Ltd), the leading wallet payments company, MobiKwik also competes with Freecharge (Accelyst Solutions Pvt. Ltd) and Oxigen Services India Pvt. Ltd, among others.
Paytm, which launched the QR mode of payment in October , grew to have a wallet penetration of 135 million in July 2016 and expanded its merchant base to over 115,000 vendors.