Net 1 UEPS Technologies, a South Africa-based provider of alternative payment systems, today announced that it has strategically partnered with MobiKwik and will be investing $40 million in the Gurgaon-based mobile payment company.
This May, the company had raised its Series-C round led by Japan’s payment gateway GMO, and MediaTek, a Taiwan-based semiconductor company, raising $50 million.
MobiKwik, with over 32 million users and 1,00,000 retailers had so far raised $85 million from investors including Sequoia Capital, Tree Line Asia, American Express, Cisco Investments, GMO Payment Gateway, and MediaTek, as well as founders and executive officers Bipin Preet Singh and Upasana Taku.
In addition to the investment, Net 1’s virtual card technology will be integrated across all MobiKwik wallets in order to provide ubiquity across merchants in India.
“Over the next three years, MobiKwik has targeted having 150 million users and 5,00,000 merchants, and the introduction of our various technologies is expected to enhance their value proposition and differentiation to users, online and offline merchants, increase acceptance, and accelerate growth,” said Serge Belamant, Chairman and CEO of Net 1.
He further added, “With Net 1’s expertise and track record in facilitating financial inclusion across Africa, our strategic relationship with MobiKwik marks an important milestone from which we can leverage India’s substantial efforts to drive financial inclusion, down to the grassroots in rural and deep rural areas. Many of our solutions, most notably UEPS/EMV, are tailor-made to provide multiple financial and other services, increase accessibility, eliminate fraud, and reduce cash,” he concluded.
UpasanaTaku, Co-founder of MobiKwik, said, “We greatly value our partnership with Net1 and look forward to learning from their best practices in serving the un-banked and under-banked users while taking progressive steps towards making India a cashless economy. Our pioneering innovations in the fintech industry have helped us maintain this lead position, and with support from strategic partners such as Net1, we look forward to further strengthening our product offering and realise our vision to let users save, borrow, pay, and invest using MobiKwik.”
Apart from MobiKwik, which was founded in 2009, the segment in India is dominated by players like Snapdeal-owned FreeCharge and Alibaba-backed Paytm. This segment has been abuzz with the hefty investments flowing into it.
The number of fintech startups funded in the first half of 2016 equals the total number of startups funded in the sector in 2015. According to YourStory Research, $1.2 billion has already been invested in fintech startups in the last two years.
According to a July 2016 Google-BCG study, the size of India’s digital payments industry will reach $500 billion by 2020. It also predicts that more than 50 percent of India’s internet users are expected to use digital payments by 2020.
The report also predicts that the value of remittances and money transfers that will pass through alternative digital payment instruments will double to 30 percent by 2020.