Mobikwik, other mobile wallets bank on payments bank license

New Delhi: Getting a payments bank license will build trust with customers, says Mobikwik founder Bipin Preet Singh. Mobikwik claims to be the largest mobile wallet in India, with more than 15 million users. It is one of the 40 odd applicants for a payments back license and if it does bag this coveted license, it can turn a wallet users’ account into a full fledged savings account. This means mobile wallets can then earn customers some interest on deposits and they will get other facilities like cash withdrawal at ATMs too.[caption id=“attachment_2012129” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] The biggest fallout of a license would be a test of promises being made by license aspirants like Mobikwik about aiding the government’s plans for financial inclusion - since a payments bank will also allow users to withdraw cash without having an existing bank account. Apart from Mobikwik, other mobile wallets like Oxigen, Itzcash are also applicants for payments bank license. Paytm’s Vijay Shekhar Sharma has applied in his personal capacity. As of now, Mobikwik allows wallet users to make online utility bill payments, recharges and quick payments while shopping with over 20,000 merchants and over 5000 e-commerce players. It claims to facilitate three lakh transactions a day. Customers can store up to Rs 50,000 in their MobiKwik wallets and use this amount to purchase goods and services on third party merchant websites and mobile applications. MobiKwik’s vision is to reach 100 million mobile Indians with a low cost payment and banking solution by 2016. Recently, Mobikwik has introduced a service which allows wallet users to pay for coffee at Cafe Coffee Day outlets without using either plastic money or cash. To a question on whether competitors like Paytm getting funded by famous investors - Alibaba’s Jack Ma facilitated an investment of anywhere between $500-700 million for a 25 percent stake in Paytm - puts pressure on the mobile wallet industry, Singh said there was no pressure. “Capital infusion allows a company to do better brand building and invest more in some areas. But capital alone does not help any company will the market. Besides, India is a large market and there is ample opportunity for everyone”. Besides, the regulatory aspect of mobile wallets also throws challenges, Singh said. Mobikwik itself is in talks for a major round of funding, which could be close to $100 million. Singh declined to share details, merely saying even after this round of funding, promoters’ shareholding in the company will remain above 51 percent. With over 900 million mobile subscribers growing at double digits year-on-year and a large segment of the Indian population unbanked, mobile wallets have huge potential in India.