MobiKwik boosts ad spend to race ahead in digital wallet business

   2024-07-08 20:07

Mumbai: IPO-bound MobiKwik has ramped up its advertising expenditure and boosted product offerings to race ahead in the prepaid payment instruments (PPI) wallet business, according to a top executive of the fintech company, as it seeks to capitalize on Paytm’s recent Reserve Bank of India (RBI) setback.

Upasana Taku, co-founder of MobiKwik told Mint that the company, which earlier onboarded 85% of consumers through organic acquisitions, is now also investing heavily to grow both its merchant and consumer businesses to take on incumbent leaders in the space.

“There aren’t many good wallet products in the market now. (There are) many UPI products, but a wallet plus UPI product is not easily available. During the same time, another player in the market had significant regulatory issues,” Taku told Mint, referring to Paytm Payments Bank, which was barred by the Reserve Bank of India from accepting new deposits in any customer account, including prepaid instruments, due to persistent non-compliance.

According to the latest PPI statistics released by the RBI, MobiKwik has moved from owning 5% share of all PPI wallet transactions (in value terms) in February this year to about 23% in May, leaving Paytm, IDFC First Bank and ICICI Bank behind.

In May, MobiKwik facilitated about 2,673 crore worth of transactions from its PPI wallet, up from 979 crore in February 2024.

MobiKwik strikes hot iron

Taku said that the RBI allowing wallet interoperability over UPI also helped the company boost transactions with its launch of Pocket UPI. Pocket UPI allows customers make instant payments via their digital wallets without linking their bank accounts.

In an attempt to acquire new users, especially in small towns, MobiKwik has been promoting its newest offering Pocket UPI.

“We also heavily marketed it (Pocket UPI) in the months of February, March and April. In fact, in March, April, when IPL had just begun, in the first 10-15 matches, we heavily advertised it also,” said Taku. “About 70-75% of our new users come from these areas, many of whom are new to digital payments. We primarily use digital marketing, local language advertising, and platforms like Google, YouTube, and social media (to acquire new users).”

Meanwhile, on the merchant side, the company has scaled up its acquisition of small merchants and plans to boost lending to this segment. “We’re expanding aggressively into smaller cities, hiring teams and contract workers to increase our merchant reach.”

Speed bumps for MobiKwik

While MobiKwik is ruling the game with its high size of transactions, it still faces the challenge of onboarding more customers on its wallet. As of May, Paytm and PhonePe beat the company with 380 million and 199 million wallet accounts respectively, compared with MobiKwik’s 137 million wallet userbase.

Lower wallet accounts have also resulted in the company falling behind in terms of transaction volumes on its platform. “We acquire users who will spend with us and be useful for cross-selling financial products. Our average transaction value is one of the highest, indicating that users are doing more transactions with us in a month,” said Taku.

Founded in 2009 by wife and husband duo Upasana Taku and Bipin Preet Singh, MobiKwik is a mobile wallet and financial services company that allows customers to send and receive money, and pay various utility bills.The company’s majority of revenue comes from distribution of financial products, while about 45% comes from the payments business.

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