Fintech firm MobiKwik is under fire after admitting a “processing error” triggered a ₹40 crore payout fraud. With police arrests, frozen accounts, and past fraud scandals resurfacing, critics question whether India’s listed fintech player is masking systemic failures under the guise of a glitch.
A Glitch That Cost ₹40 Crore
MobiKwik disclosed that between September 11 and 12, a “limited internal processing error” marked failed transactions as successful, leading to unauthorised payouts to merchants in Haryana’s Nuh district. According to investigators, merchants and users colluded to exploit the bug, siphoning funds before the loophole was sealed.
The company insists the issue was detected and resolved in 45 minutes, with a First Information Report (FIR) filed in Gurugram. Around 2,000 merchant accounts were frozen by the company, while police separately froze 2,500 beneficiary accounts tied to the fraudulent settlements. Law enforcement has arrested six people in connection with the case.
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Despite claiming swift containment, the filing acknowledges that ₹40 crore was exposed, of which only ₹14 crore has been recovered. The net impact stands at ₹26 crore, raising sharp questions about the company’s internal risk controls.
Not the First Fraud at MobiKwik
This latest fiasco adds to MobiKwik’s checkered record. Earlier this year, in March, the company revealed that a former employee siphoned ₹1.26 crore between August 2023 and September 2024 by manipulating merchant records.
Critics argue that two significant fraud incidents in less than a year expose deeper vulnerabilities in MobiKwik’s governance and internal security. While the company repeatedly stresses that no employees or insiders were involved in the most recent glitch, skeptics remain unconvinced.
Financial Struggles and Credibility Crisis
Beyond fraud scandals, MobiKwik is also battling dismal financial performance. In Q1 FY26, the fintech player’s revenue plunged 20.7% year-on-year to ₹271.4 crore, while its net loss ballooned sixfold to ₹41.9 crore.
With growing competition in the UPI and digital payments space, MobiKwik’s latest controversy threatens to further erode public trust. For a listed company seeking to reassure investors, the narrative of “glitch, not fraud” may prove too convenient and dangerously unconvincing.
