MobiKwik Loses Over $3 Mn From Its Bank Due To Glitch In Digital Wallet

Gurugram-based digital wallet MobiKwik has lost over $3 Mn (INR 19.61 Cr) due to a technical glitch.

A company official said the money was deducted from MobiKwik’s corporate account during online transactions made by individual customers. These wallet transactions were pertaining to recharge, bill payment, shopping etc.

A Mobikwik spokesperson told Inc42, “We detected a financial discrepancy on the company by some unidentified persons. We reassure that our users’ data and money is safe and secure and is not compromised and also payment gateway transactions are safe and secure with strong firewalls. We have taken immediate action by lodging FIR with Gurgaon police cyber cell for criminal investigation and to punish the culprits.”

While earlier reports suggested that the loss was caused by a technical glitch, MobiKwik’s stance on the situation may hint towards foul-play.

The Technical Glitch – What Exactly Happened?

The suspected glitch, however, benefited the users affected by it as they did not have to pay for their transactions. However, the digital wallet company ended up losing a total of $3 Mn (INR 19.61 Cr) over a period of three-and-a-half months.

The discrepancy came to light during an internal audit claims the company. Following the discovery, a complaint was filed at Sector 53 police station in Gurugram.

In his complaint, Lokesh Rajpal, the general counsel of MobiKwik, has alleged that some people took advantage of the technical glitch and transferred money from the wallet to their bank accounts. He said, “Anybody can transfer the amount from his or her mobile wallet to bank account. And, taking advantage of the technical glitch, some people transferred money to different accounts.”

Commenting about the investigation, Anand Yadav, in charge of the cyber crime cell told TOI, “Prima facie it seems to be a technical glitch. We have started an investigation into the matter and are trying to find out if there is any fraud involved.”

Interestingly the company recently announced that MobiKwik observed over 400% increase in QR code transactions in this year. As per an official statement, MobiKwik currently has over 1.5 Mn QR codes deployed across small and large retailers in the country.

“QR codes will drive digital payments in India and major use cases such as milk, grocery and small mom & pop stores have great acceptance for QR code payments. It is also an economical mode of enabling digital payments for merchants, and we feel that the arbitrage of convenience is driving this growth,” Vineet Singh, Chief Business Officer of MobiKwik said.

The company is currently aiming to enable 5 Mn merchants with QR codes by the end of 2017, said Vineet. MobiKwik currently has a network of over 1.5 Mn direct merchants and 60 Mn plus users. The company has expanded to cities like Pune, Mumbai, Bengaluru, Kolkata and Jaipur and planning to set up offices in 13 more cities by the end of 2017.

In August 2017, the digital wallet company raised $35.2 Mn (INR 225 Cr) from Bajaj Finance Ltd (BFL) by selling 11% stake. Later the same month MobiKwik worked on the digital wallet launched by Indian state-owned telecommunications company Bharat Sanchar Nigam Limited (BSNL). The recent technical glitch has definitely caused a hefty dent of about $3 Mn to the digital wallet company. It might also raise questions about the safety of funds in the digital wallet. How soon will MobiKwik be able to determine the source of the glitch and how will it recover the losses from users, remains to be seen.

(The development was reported by The Times Of India)