MobiKwik loss soars 694 percent as fraud hits

Digital payments provider MobiKwik reported a substantial increase in losses for the three months ending September, driven primarily by financial fallout from a security breach. The firm posted a consolidated net loss of 28.6 crore rupees during the period, a nearly eightfold jump from the 3.6 crore rupees lost during the corresponding quarter one year earlier.

An exceptional charge of 11.8 crore rupees stemmed from fraudulent activity discovered within the platform. Certain merchants and account holders took advantage of a software vulnerability to process unauthorized transactions totaling 40.4 crore rupees. The company has reclaimed 21.9 crore rupees and secured an additional 6.6 crore rupees through legal proceedings and written commitments from merchants. Authorities were notified in September, and an outside consulting firm was brought in to examine the matter.

Revenue from business activities declined 7 percent year over year to 270.2 crore rupees. Operating losses before interest, taxes, depreciation and amortization reached 6.4 crore rupees, though this represented a significant improvement from the 31.2 crore rupee operating loss recorded in the prior quarter. The company generates income through transaction fees charged to merchants and interest-related charges from its lending operations.