MobiKwik, a mobile wallet startup from India
MobiKwik, a mobile wallet startup from India

SAN FRANCISCO (Diya TV) – India-based mobile wallet startup MobiKwik have received a $40 million strategic investment from Net1, a mobile payment firm that specializes in services for those who do not have bank accounts. Net1 are worth just under $500 million and have been listed on the NASDAQ stock exchange since 2005.

As part of the agreement, the South African-based Net1, which is also an active company on the Johannesburg stock exchange, will integrate the company’s virtual card technology into MobiKwik’s wallet app to help its 100,000 merchant partners access a wider body of payments. The program works by creating a virtual card using a mobile phone as the identity in order to process transactions like a physical credit card. Businesses can prepare for these emerging trends by implementing portable payment systems that can accept such forms of payment.

“Virtual cards are used like traditional plastic credit or debit cards, except that as soon as the transaction is authorized, the generated card number expires immediately. While it has been focused primarily on card not present transactions for internet payments in our initial deployments, we have the ability to customize the software as industry acceptance increases to incorporate new trends such as presentation through NFC or Quick Response, or QR, Codes,” Net1 explains on its website.

Net1 said they are excited about the partnership with MobiKwik, a company which itself boasts a user base of 32 million. A strategic move in order to grow Net1’s presence in India, a country where smartphone ownership is on the rise among its population base of one billion-plus.

“Our strategic investment in MobiKwik provides us with meaningful participation in one of the largest and fastest growing digital payment markets globally,” Net1 chairman and CEO Serge Belamant said in a statement.

“Over the next three years, MobiKwik has targeted having 150 million users and 500,000 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,” he added. “There are many factors to consider for the various technologies we are going to be offering in the future, such as compliance with ever-changing data protection laws. However, there are many outsourcing options we can consider should this be larger than expected.”

MobiKwik is already backed by such companies as Japan’s GMO, Mediatek, Sequoia, Cisco and American Express. The company have raised over $120 million in funding to date, including its last round of Series B funding, a $50 million investment received last May.