Mobikwik Systems has achieved a significant milestone by obtaining in-principle approval from the Reserve Bank of India (RBI) for a Payment Aggregator-Physical (PA-P) license. This license enables the fintech company to expand its services into offline merchant payments across India.
This development follows Mobikwik's recent acquisition of a non-banking financial company (NBFC) license from the RBI, marking a strategic move to tap into under-penetrated markets.
Growth Potential
Mobikwik aims to leverage offline payments as a long-term monetization avenue, focusing on merchant engagement and utilizing transaction data to enhance lending options for merchants. Industry estimates suggest that the gross merchandise value (GMV) for merchant payments could reach between $1.8 trillion and $2 trillion by FY28.
Advantages of Offline Payments
The company highlights several advantages of offline payments:
- Potential for stronger Merchant Discount Rate (MDR) opportunities.
- Subscription and device rental economics.
- Lower competitive intensity compared to online consumer payments.
Current Merchant Support
Currently, Mobikwik supports approximately 4.9 million merchants through various offerings, including UPI QR codes, soundboxes, and electronic data capture (EDC) machines. The company acts as a technology enabler for its banking partners.
Future Plans
Over the next 18 to 24 months, Mobikwik plans to concentrate on expanding its presence among small businesses, organized retail, and fuel outlets. The company also intends to significantly increase the deployment of its soundbox and EDC devices.
Leadership Insights
Bipin Preet Singh, co-founder and CEO of Mobikwik, expressed optimism about the approval, stating that offline merchant payments are becoming a crucial growth driver in India's digital economy, especially in less urbanized areas. He emphasized that this license will enhance the company's ability to scale its merchant payment infrastructure nationwide, targeting a tenfold growth in its merchant business by FY28.
Recent Financial Performance
In its latest quarterly results for FY26, Mobikwik reported a net profit of Rs 4.38 crore for Q4, a turnaround from a net loss of Rs 56 crore in the same quarter the previous year. Revenue from operations also saw an 8% year-on-year increase, rising to Rs 289 crore from Rs 268 crore.
