NEW DELHI: Mobile wallet venture MobiKwik will apply for a payment banking permit, a top executive said, as the company is keen to offer the service that is part of the Reserve Bank of India’s financial inclusion initiative.

This comes days after rival Paytm announced its interest for a payment banking licence. MobiKwik’s payment bank service will revolve around the mobile wallet that the company offers to about 12 million mobile phone users across the country, Mrinal Sinha, the company’s head of strategy, told ET.

The Gurgaon-based company will partner with potential businesses or companies including banks that have physical touch points for educating first-time mobile wallet consumers, and plans to offer interest rates similar to those offered by savings bank accounts.

“Our strength is technology and innovation, which is where we want to focus,” Sinha said. “Since we don’t have physical touch points, we are discussing with potential partners, including banks, ensuring that our strengths are complementary.”

Sinha added that consumers prefer to use mobile wallets for convenience and ease of transaction, the adoption and growth of which may not solely be dependent on the interest rate offered. A mobile wallet is a pre-paid payment instrument, which allows customers to digitally store money in a secure virtual wallet and use it for transactions such as DTH service top-ups, mobile recharges, paying utility bills and buying movie tickets.

To start off with, customers will be able to use primary services such as savings accounts and payment for utilities, pitting it directly in competition with services offered by telecom companies Bharti Airtel and Vodafone India.

MobiKwik aims the mobile wallet to turn into a full-fledged savings account in the long term, which will provide mobile banking solution to millions of underbanked or unbanked people and allow them to transfer money to other wallets or account holders apart from making payments at various merchant outlets connected to the company’s wallet services. RBI rules do not permit cash withdrawals from mobile wallets, something a payment bank will be allowed to offer.

A payment bank will be allowed to take deposits of up to Rs 1 lakh but will have to invest the money in government securities. It cannot lend. A payment bank can also offer locker and vault facilities. RBI has extended the deadline to apply for a payment bank permit to February 2 from January 16. According to industry estimates, MobiKwik records close to Rs 1,200 crore annually through 2.5 lakh transactions a day.

Source: ETTelecom