Authentication market set to grow multifold as people going digital

The digital payment company Wibmo is the market leader in the authentication business in India with nearly 70 per cent of all transactions being routed through this fintech firm. The company, which was acquired by global payment leader PayU in 2019, operates as an independent entity and pursues its own growth path post this acquisition. In an exclusive interview with Bizz Buzz, Chief Executive Officer at Wibmo Suresh Rajagopalan said that the company is expanding in Africa, and Middle East markets with its portfolio of products. It is also pursuing a diversification drive to derisk its business through focusing on its emerging segments

Fintech companies have benefitted from the first wave as more number of users have migrated to the digital transactions. As the second wave of Covid-19 is raging in India, how does it going to impact the fintech space?

All businesses must have projected to grow better than last year. But the second wave is kind of forcing people to revise their targets. So there are certain challenges. Anyway, people have already moderated consumption due to the pandemic. Companies have taken a lot of cost cutting measures last year, which is likely to continue this fiscal year.

But, as a fintech company, we have seen rising demand. This is because most transactions are happening online such as ecommerce and through debit and credit card route. While consumers are doing a lot of transactions through ecommerce route, even small shops are also accepting money through digital means. These factors have led to more number of digital transactions.

Global payments firm PayU acquired Wibmo in 2019. Have things changed after this acquisition? Are there any changes in your strategy after PayU's acquisition of the firm?

Wibmo is an independent entity and we report our P&L to PayU Payments India. But as an entity, we are independent. PayU has been a good investor. Whatever is our growth plan, PayU supports us in our plans. Also, after PayU came in, our vision of doing business only in India changed. Earlier, we used to do business only in India. From the end of 2019, we started work outside India. Last year, we had done good business overseas that includes Asia, Africa and the Middle East market. We have recruited people outside India and seen good traction in our business. So, all of that happened. After PayU came in, there was no change in our plans and we have improved during this period.

How many transactions have happened in 2020? What are your expectations in 2021? How is your growth in the overseas market?

As a company, we don't provide the exact number. But what we can say is that we have achieved our target. During last year, we had to accommodate some rate revisions from clients in India.

As far as overseas market is concerned, the growth will reflect this year. Because we had signed $18 million-$20 million kind of deals in the foreign market, the growth from which will reflect this year. We do business on platform basis and not on transaction basis. So, as and when the volumes grow, we earn more income.

If you take into account all the banks in which our platform is running, we are nearly 2.6-2.8 billion authentication per annum. As far as authentication space is concerned including OTP-based two factor authentication, we are the market leaders in India. We process 70 per cent of India's all card-based transactions, be it Visa, Mastercard or Rupay. If you are using any of the major online shopping platforms such as Flipkart, Amazon, the authentication is done through us. That is because we work with the banks. As we deal with banks, our business model is slightly different from PayU. PayU deals with merchants, while Wibmo deals with banks.

How many banks are currently using services from Wibmo? How is this portfolio performing?

For the authentication business, we are working with 185 banks in 33 countries. In India, we are working with 65 banks.

As far as revenue is concerned, we get around 60 per cent of our revenues from authentication business. We have other businesses like payment gateway, prepaid card, payment risk management among others.

You also provide video KYC services. Has that picked up in the recent time due to the pandemic?

Yes, we provide video KYC services to banks and other financial institutions. But it has not picked up much. I would say companies like brokerage firms have started using it. But it has not being adopted much.

We have seen TRAI regulations in disrupting the OTP sent to the customers by various financial institutions. What is your level of preparedness for the new system?

We are fully prepared. Because the regulations came last September and we have been prepared from that time. The only problem is that banks have to give us the same message that they have given to TRAI. After the initial issues, things have settled now.

During the pandemic period, we have seen rising number of cyber security threats. How are your products in the cyber security space performing?

Cyber threats have risen manifold during this pandemic period. Under cyber threats, the vulnerabilities of the user or the devices used by him are exploited. The second is concerning to organisations. We are running the infrastructure of around 65 banks. Last year, around 103 audits had been conducted by banks on our IT infrastructure.

Unlike many fintech players, we don't put our data on cloud. We run the data on our data centres and don't expose much to the cloud. In that sense, we are safe. But we are constantly buying new tools to augment our security features.

What are your diversification plans going ahead?

We divide our business into two segments. One is the growth business and the second one is the emerging business. The growth business is the fraud and security management segment in which we continue to invest. The emerging portfolio is prepaid, wallet business, in which we are investing and planning to scale it up.