As providers battle for dominance in the rapidly growing payments space in India, they continue to rely on different strategies to carve out their own footholds in the market.
This week, payment facilitator MobiKwik announced that it has turned a profit (excluding interest, taxes, depreciation and amortization) for the first time, a landmark that still awaits some of its competitors, according to TechCrunch.
To reach this point, the company said, it has pivoted away from pursuing a direct, head-to-head competition with the likes of fellow PF Paytm to attract users with promotions such as cashback deals to do so.
“We have been in an ecosystem where we have seen a lot of high-growth and several regulatory changes in the payments domain. But what we realized was that payments alone is likely not going to be a very profitable business,” Bipin Singh, co-founder and CEO of MobiKwik, told TechCrunch.
Instead, MobiKwik said, it has turned to adding other financial services – such as insurance and lending – to its app to increase value for its users and bring in more revenue. The company’s core business – mobile wallet and payments processing – pulls in about 75% of its revenue, with the added financial services accounting for the rest.
Paytm, which reported 350 million users earlier this year compared to MobiKwik’s 110 million, is not profitable at this point, the article said.
For its part, Paytm is pursuing an aggressive growth strategy that includes expanding into different markets.
Last week, the company announced that it was planning to increase its educational services offerings to include insurance for tuition fees and a co-branded debit card for educational institutions, looking to double or triple its gross merchandise value from this space to $2-3 billion, according to Livemint.
And just a couple of days earlier, the same publication reported that Paytm was looking to increase its user base within healthcare payments, enabling doctors to receive fees through Paytm.
“Paytm has to create more use cases for its customers and get more people on its platform. It’s not just about doctors. It could soon create something for handy men such as carpenters. This seems to be the right way to go forward,” Harish H.V., managing partner for ECube, an environmental, social and governance fund, told Livemint.