The move is in line with the app company’s strategy to be a partner and solutions provider to traditional financial services companies such as banks, instead of recreating the whole banking infrastructure for itself.
The company did not get a Payments Bank license in the first round, while rivals like Airtel Money, PayTM and Idea Money qualified for the same.
This encouraged the company to look at partnering existing banks and bringing them into its app network.
The new app, called IndusInd Mobikwik, works like a banking app for purposes of payment.
Customers of IndusInd Bank can link their account to the app and use the money held in their bank account like their wallet balance.
This means that they don’t have to refill their wallet every now and then, and they can also earn interest on the balance.
The transaction is authorized with an additional factor of authentication, in line with mobile banking guidelines, it said.
For banks, the solution provides a quick and effective way to have a robust and user-friendly payment app without having to develop one themselves.
“The partnership with MobiKwik is to leverage the synergies in the payments business between Banks and fintechs, to bring the customers the best of both the worlds in a seamless fashion,” said Ritesh Raj Saxena, Head–Savings, Digital & Payments Business, IndusInd Bank.
“The latest PPI (prepaid payment instrument) guidelines of RBI reinforce the roadmap for wallet operators and partnerships with Banks, and our association is a significant step in the same direction,” it said.
The customers will also be able to send money using IndusInd Bank’s UPI infrastructure going forward, it added.
IndusInd Bank has 1250 branches, and 2146 ATMs spread across 690 geographical locations of the country