Upasana Taku, co-founder and director, MobiKwik.
Upasana Taku, co-founder and director, MobiKwik.

There’s a need to bring about change in the way financial products reach real India: MobiKwik’s Upasana Taku

The problems of ticket size, ease of use and access to financial products are what we are trying to solve, says Upasana Taku, co-founder and director, MobiKwik

Following competitor Paytm’s move into wealth management, MobiKwik acquired Clearfunds, an online mutual funds advisory platform, to widen the scope of financial services offered on its portal. Upasana Taku, co-founder and director, MobiKwik, talks about why Clearfunds fits the bill and the role of digital payment companies in improving financial inclusion.

What made you believe that Clearfunds was the right fit for Mobikwik’s first-ever acquisition?

At this stage, we are trying to build a full stacked financial services platform. Moving in this direction, lending is something we launched in the first half of this year and we recently announced digital gold and insurance too. Wealth management was the one thing missing and we are looking at being a company that has significant inroads into this and Clearfunds checked a lot of boxes. Currently, there are about 38 asset management and MF companies in India and Clearfunds is the only company that is directly integrated with all of them via direct UPI and this was a big win. Various other platforms that offer the same services are integrated only with 8-10 AMCs. Also, the products and the platform Clearfunds has built in terms of tech such as AI-based robo advisory to understand user needs is great. The company is just two years old but it already has $45 million worth AUM (assets under management) which is a great accomplishment. Clearfunds and its founders are continuing to build on the wealth management category on MobiKwik to bring the best investment options available in the country on our platform. 

Paytm Money forayed into the mutual funds business in April. It has already partnered with 30 fund houses and has about half a million users as of August. Then there are seasoned companies such as FundsIndia and Zerodha. How does Mobikwik plan to thrive in this competition?

India is a country with more than 1 billion people but less that 6-7% have access to financial services of any form whether it’s investments, insurance or credit. Only 72 million Indians have ever taken credit of any form. The opportunity is immense because 200 million people have smartphones now and can be serviced by tech platforms and the number is only going to rise. So I don’t think there is a question of competition with any one player or the other because it is not possible for any one company to be able to quickly service all these users. What works for us is, we have our own large user base and neither FundsIndia nor any other wealth management start-up has this asset. Our main task is to create a strong value proposition on our platform so our users don’t have to look at any other alternative. People don’t want to download multiple apps and do the installation and registration process again and again. We want to make sure our user base stays loyal to us. There are about 90 banks in India, 11,000 NBFCs and 30-plus insurance companies and all have their own market share. The opportunity is so huge that there is place for everybody to do well.

The penetration of MF investments in India is not very high. How will digital wallets venturing into wealth management help boost this?

Most of India falls in the low-income group and these people can’t afford the annual premium for their health or life insurance policies. MobiKwik is selling insurance at 20 per year which gives a 1 lakh cover for accidental death and permanent total disability. The real India needs a change in the way financial products reach them. Similarly, for MF investments, until a year ago, the minimum investment amount was 10,000, which was later brought down to 5,000 and now it’s 100. If people are poor, it doesn’t mean they shouldn’t be allowed to save.

The distribution of financial products has typically been via a relationship manager or a branch model which required people to physically go to a bank or an AMC to start investing. This model served only people who want to invest huge amounts and can afford the commission charges but how does this work for the masses? This can work only with a self-served model which has not been created by any of the top banks such as SBI and we are doing this by allowing people to invest directly with a few clicks. The FD rates are consistently going down so even the poor need better saving and investment options and it’s our responsibility to create consumer awareness by taking such products to larger markets. The problems of ticket size, ease of use and access to financial products is what we are solving.

RBI recently allowed transfer of money from one digital wallet to another. How will this impact the adoption of digital payments in the country? 

Right now it’s a policy which will allow interoperability between wallets and also banks because UPI has enabled this interoperability. This means now a PayZapp user will be able to pay on a MobiKwik QR code and a MobiKwik user will be able to pay on a Paytm QR. All companies have invested a lot on building their own infrastructure but it is not possible for a few of them to build an infrastructure for the entire country. Interoperability will increase access for digital payments. Overall, it will increase digital awareness and improve penetration of digital payments in India which is great because the ultimate goal is to reduce cash usage which in the long run will help develop the economy. 

The guideline will also allow us to become direct participants of the Visa MasterCard scheme which means we can directly issue our own cards without partnering with any bank and it could be a virtual card or a physical card which our users can use anywhere. Even in places where MobiKwik is not accepted, having this card will allow our users to pay at places where Visa cards are accepted. 

Will interoperability open up opportunities and encourage more start-ups in this space? 

Competition is always welcome. When you are at a certain scale, you can’t expect new company to not enter the ecosystem right? Innovation will continue to happen. I think in a space like this it will be harder and the right analogy for this is Amazon and Flipkart. They are well-established large e-commerce platforms in India and a lot of others are trying and coming up with new start-ups in the same space but it is hard for them to get the same kind of distribution and user base. So people will always try, some may succeed, some may not. 

It’s been two years since demonetisation. How has the adoption of digital wallets changed ever since? 

Demonetisation was a big watershed movement because we saw numbers grow four to five times in the year after the announcement. The market for us is expanding ever since demonetisation; users are exploring more options on our platform. This will continue to happen for the next five years. RBI data shows strong growth in usage of mobile wallets. We haven’t seen a drop in transactions ever since demonetisation. Even UPI is picking up in a big way. People are opting for pre-loaded wallets for everyday chores such as buying tatkal train tickets and groceries because it is cumbersome to pay with debit cards. The number of people using digital wallets during the demonetisation exercise would be significantly higher for sure but overall I have not seen the count of transactions go down. All forms of digital payments (debit cards, UPI and wallets) will grow parallelly.

Opportunity is so huge, everybody will do well

Paytm Money forayed into the mutual funds business in April. It has already partnered with 30 fund houses and has about half a million users as of August. Then there are seasoned companies such as FundsIndia.com and Zerodha. How does Mobikwik plan to thrive in this competition?

India is a country with more than 1 billion people but less that 6-7% have access to financial services of any form whether it’s investments, insurance or credit. Only 72 million Indians have ever taken credit of any form. The opportunity is immense because 200 million people have smartphones now and can be serviced by tech platforms and the number is only going to rise. So I don’t think there is a question of competition with any one player or the other because it is not possible for any one company to be able to quickly service all these users. What works for us is we have our own large user base and neither FundsIndia nor any other wealth management start-up has this asset. Our main task is to create a strong value proposition on our platform so our users don’t have to look at any other alternative. People don’t want to download multiple apps and do the installation and registration process again and again. We want to make sure our user base stays loyal to us. There are about 90 banks in India, 11,000 NBFCs and 30-plus insurance companies and all have their own market share. The opportunity is so huge that there is place for everybody to do well.

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