MobiKwik, which offers an online mobile & DTH recharge service, along with a closed wallet system, MobiKwik Balance, integrated with the service, has now introduced CashPay, a service that will allow users to pay for recharges in cash. Essentially, the service will allow users to load their MobiKwik wallet with cash instead of paying via Credit or Debit cards or Net Banking.

They will be able to top-up with any amount in the range of Rs 500 to Rs 2000. The cash will be collected physically from the users’ premises at no additional cost, according to the company and will reflect in their online wallet within a few minutes. The same amount can then be used for recharging Mobile and DTH accounts, and also for purchasing apps from MobiKwik’s recently launched app store.

MobiKwik Co-founder, Upasana Taku, informed MediaNama that the company has tied up with two leading providers for enabling cash collection across all major Indian cities. The company is not charging extra for the service. It also plans to extend it to its IVR based recharge service, in the near future.

On being asked if it would be feasible for the company to not pass on the cost to the user, she responded, that the company will be absorbing the cost in order to drive user adoption and pull-in new users. She added that MobiKwik had stopped charging a convenience charge since September 2011, since users did not wish to pay extra for online recharge and till the market evolves, it did not intend to levy it.

Upasana claims that about 40% of MobiKwik’s users retain a balance in their wallets, which was significantly more than what they usually do on competing platforms. She said that offering Coupons was no big a deal, and the company has managed to tie-up with various companies including Cleartrip, ibibo, IndiaPlaza and others within a month of launching the feature. She added that companies infact look for distribution platforms for discount coupons. MobiKwik does not charge extra for coupons, and customers can opt to get all the coupons on offer even if they transact for Rs 50.

The mobile wallet functionality decreases the instances of failed transactions, which is the primary pain point for online ecommerce services. Big ecommerce players like Flipkart have also introduced a closed wallet but have not extended cash collections for the same. PayTM*, which is one of MobiKwik’s competitor also offers a wallet storing money from refunds or promotions, but doesn’t allow users to load cash. Doorstep cash collection looks like a good incentive for customers to use the service, but it all depends on the efficiency of the entire process, and on building user trust, at the end of the day. Offering cash backs and rewards can also help in driving repeat usage.

In addition to PayTM, MobiKwik also competes with other online services such as Rechargeitnow and Freecharge.in, which had recently raised Rs 20 crore from Sequoia Capital India.

*Disclosure: Paytm is an advertiser with MediaNama