New Delhi — Fintech firm MobiKwik has admitted that a processing error, not a hack, caused a fraud amounting to ₹40 crore. The case has sparked arrests, frozen accounts, and renewed concerns about the company’s governance and security systems.
A Glitch That Cost ₹40 Crore
MobiKwik stated that between September 11 and 12, a “limited internal processing error” wrongly marked failed transactions as successful. This led to unauthorised payouts to merchants in Haryana’s Nuh district. According to investigators, some merchants and users exploited the bug before it was fixed.
The company said the issue was detected and resolved within 45 minutes, and an FIR was filed in Gurugram. MobiKwik froze around 2,000 merchant accounts, while police froze another 2,500 beneficiary accounts. Six people have been arrested so far.
- Total exposure: ₹40 crore
- Recovered: ₹14 crore
- Net impact: ₹26 crore
- Accounts frozen: 4,500 (by company & police)
- Arrests: 6 people in connection with case
Not the First Fraud at MobiKwik
This is not the company’s first scandal. In March 2025, MobiKwik disclosed that a former employee had siphoned off ₹1.26 crore between August 2023 and September 2024 by manipulating merchant records. Critics argue that repeated incidents highlight serious governance and security gaps.
Financial Struggles and Credibility Crisis
MobiKwik’s troubles go beyond fraud cases. In Q1 FY26, the company’s revenue fell 20.7% year-on-year to ₹271.4 crore, while net losses surged sixfold to ₹41.9 crore. With growing competition in UPI and digital payments, the firm’s credibility has taken another hit. Experts warn that simply calling the fraud a “glitch” may not reassure investors or customers.
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