Nothing To Fear: Mobikwik
'It's a long journey. This is not a winner takes it all market'. For the founder of India's second largest mobile wallet, the night of 8th November may have set wallet companies on a super sonic jet plane, with some on a higher gear mode, taking a quantum leap. But that alone might not be enough to keep you up in the air, forever.
The term, 'Consumer is the king' resurrects once again, for the Mobikwik duo, Bipin Preet Singh and Upasana Taku, who do not believe in becoming just another Unicorn, but a 'credible', no matter, number two.
"Our approach is very different from PayTm. Doing everything doesn't make you successful in long term,"says Upasana, underlining how Mobikwik doesn't want to dominate the system, unlike Paytm but partner with banks and merchants, adding compliments to its existing identity. By the virtue of 3 partnerships, the company claims to have the potential of acquiring 260 million customers for free.
Gone are the days of cashbacks to lure customers. Today, there is a need to look beyond these vanity metrics to retain the customer.
Bipin terms how aggressive expansion can also come with a lot of baggage. Their competitor might have been able to cash on the funding advantage, but that alone is not enough to keep the ball rolling in long term. As the e-wallet industry itself undergoes the phase of sorting out men from boys, Mobikwik is geared up for its 2nd innings, beating the odds, with a more flexible approach.
Mobikwik's biggest competitor, Alibaba backed Paytm's aggressive expansion, however, is not the only odd stacked up against it. Its an entire chaos platter! Experts have already started to ring the death bells of the mobile wallet companies with the onset of Unified Payment Interface, Government's very own BHIM, banks launching their own wallets and others. Therefore, the 2nd innings of the company entails evolving beyond wallet business, while beating these odds on the sidelines.
"Mobikwik has decided that it will no longer be just a wallet or a mobile payment app. Our vision is to make it a 'smartmoney' app. Money that one has should not be just restricted to making payments, but also use it in a smart way,"adds Bipin, placing his bets on the three major partnerships struck post demonetisation- Bajaj, BSNL and IndusInd Bank, that would add to this strategy.
The company aims to build an app that can channelize all the money, investment, loans, bank account, credit cards, as it has all the intelligence.
"Wallets have an advantage of data. All the data involving a user's transaction history sits in the app cloud and has huge opportunity to benefit the financial life of a user," says Bipin. For instance- Not only will the app auto service the loans and EMIs, but also every time the loan repayment is done via wallet, host of other opportunities and benefits would come on user's table, including smart mutual funds investment via wallet money.
Earning interest on wallet money would be the new avatar of 'Cash backs'.
Now how would the company's new 'Consumer fintech financial service' model look like? In short, the company wants to provide banking services, without being a bank which involves offering credit upto Rs 1 lakh with bank tie ups, instant short term personal loans and insurances to shopkeepers.
The partnerships with big banks and companies come at play, with the mobile wallets capability of user data information. The catch is that the user would never have to again run with a thick file to prove his eligibility, as the wallet company has already done the work- No visits, no calls, no files!
There is a huge latent demand for financial services to be delivered digitally, just like there was a huge demand to deliver payments, echoes Bipin, according to whom the big differentiator is better user information, which he claims to be far better than that provided by credit bureaus, due to frequency of transactions on wallets.
The model also includes instant loans to users in few minutes, a service not available with traditional banks. "If someone wants to purchase something and running low on balance, then one can access instant loans from their wallet, based on its data history with the app,"according to Upasana.
Therefore, the bank-wallet rivalry is put to rest by the company, as the partnership is a complete win-win for both.
According to Rajat Tandon, President at Indian Private Equity & Venture Capital Association (IVCA), e-wallets have the power to bring banking to un-banked and achieve financial inclusion of people even from the remotest area and Mobikwik is ready to cash on the same with the advantage of user base acquisition.
Experts mention that customer acquisition costs and partnerships will be key to make these financial services viable which is the biggest differentiator for companies like Mobikwik compared to smaller fintechs who have ventured into the same.
Two years back, RBI rejected Mobikwik's application for a payments bank license. Today, the company looks back and is happy it didn't make a cut. Taking on the onslaught on payment banks, the company's stance of rather turning into a full fledge financial service platform via partnerships is reflection of its 'keeping up with the industry' approach. The new RBI guidelines, might mark certain edge for prepaid payment instruments or e-wallets over payment banks, the writing on the wall of the later seems too soon.
The next big challenge for these wallets is penetration beyond urban areas. Hanish Bhatia, Senior Analyst, Counterpoint Research adds that MobiKwik must use its resources wisely as its competitor enjoys a much larger marketing war chest and must focus on new customer acquisition in Tier-I, Tier-II, and Tier III regions for growth.
"It will be an uphill task for players like PayTm with payment bank license to create offerings in sync with the needs of rural customers. Without the option to lend money, they need to make "ease of use" as one of the USPs for their business. Mobikwik however, can work as technology enabler for partnered banks with an already existing user base. Therefore, putting them in a better position to offer financial services including lending money, " says Pavel Naiya, Senior analyst, Counterpoint research.
In the end, 'to each on its own', quotes Upasana. Every wallet company has guards ready of huge user base, data power, digitalisation and technology ready to not just survive, but thrive. It would be interesting to see how they leverage the power of the same.
