(Bloomberg) -- One MobiKwik Systems Pvt., one of India’s largest digital-payment providers, is pushing back its target for profitability by a year as it invests more in its business to capitalize on the government’s shock ban on high-value rupee notes.
The demonetization drive announced late last year created a digital-payments market at least 30 times bigger than what the company had been expecting before the policy was introduced, co-founder Bipin Preet Singh said in an interview with Bloomberg Television’s Shery Ahn in Hong Kong.
About 98 percent of Indian consumer payments were made in cash before Prime Minister Narendra Modi’s decision in November to invalidate high-denomination notes. The ban left the country with about a fifth of its currency in circulation and pushed more people toward digital payment providers like MobiKwik and One97 Communications Ltd., backed by Alibaba Group Holding Ltd.
“It has offered an opportunity to grow significantly before we become profitable,” Singh said. “We are adding about 4 million new customers a month and about 10,000 merchants per day, who will accept MobiKwik payments.”
MobiKwik has more than 55 million users now, Singh said. The company will be profitable by the second half of 2019, compared with the firm’s earlier expectation of April 2018, Singh said.
One97’s payments platform currently has about 220 million subscribers. Paytm will invest about $1.6 billion over the next three to five years to more than double that user base to about 500 million, Paytm said in May.
Founded by Singh and Upasana Taku in 2009, MobiKwik has backers including Sequoia Capital, American Express Co. and Tree Line Asia Master Fund, according to the company’s website.