Digital payments platform Mobikwik will focus on accelerating growth in its payment gateway business over the next two years, which it claims achieved break-even during the quarter ended June 30, 2019. The company did not provide specific details on the financials of the business.
Gurugram-based One Mobikwik Systems, which owns Mobikwik, claims to currently have 94 million unique cards saved on its payment gateway, of which 20 million are credit cards. It is targeting transactions worth up to $20 billion over the next two years for its payment gateway vertical. The company launched the payment gateway arm in 2012 as an additional layer over consumer payments. In 2018 it added financial products to its line of business.
Incidentally, the company projects robust growth for the payment gateway arm despite the government’s recent proposal in Budget 2019 to charge zero MDR. MDR or merchant discount rate is a fee that banks charge merchants for processing payments made through credit and debit cards. “The (payment gateway) product will continue to generate revenues on credit card transactions on the gateway and add-on services,” MobiKwik co-founder Upasna Taku told TechCircle. Several fintech companies have been opposing the government’s move because they claim it deprives them of a steady source of revenues.
“We expect to make the bulk of revenues on credit card transactions. The situation now is ambiguous and we have not heard from any of the banks or merchants about making MDR zero for all transactions,” said Taku. The company will also look at alternate revenue streams on its payment gateway by charging merchants a subscription fee for providing a settlement dashboard, risk assessment and other add-on services, she said.
MobiKwik competes with Mumbai-based BillDesk and Naspers-owned PayU and SoftBank-backed Paytm in the payment gateway business. Backed by South Africa’s Net 1 UEPS Technology and Japan’s GMO Capital, Mobikwik was valued at $293.16 million (Rs 2009.12 crore) when it recently raised a funding round from NDTV and Trifecta Capital.
Founded in 2009 by Taku and Bipin Preet Singh, the company claims to be the number three player in the payment gateway market after BillDesk and PayU. “The growth of business for new age companies who we work with will also lead to us increasing our market share for the business vertical. We have been processing payments for the likes of Uber, Zomato, Grofers, as well as the IRCTC’s app. We have also signed on Dream11,” said Taku.