To take on rivals Paytm and Flipkart in the mobile payments battle, Snapdeal owned online recharge and utility payments unit FreeCharge has launched a digital wallet in partnership with Yes Bank and payment bank licensee Fino PayTech.
The new wallet will allow consumers to make payments for transactions on both Freecharge and Snapdeal. Snapdeal will spend Rs.1,000 crore towards cash-back offers and other discounts as festive shopping picks up during October-December, to attract consumers to start using FreeChrage digital wallet.
Freecharge already has a wallet-like ‘FreeCharge Credits’ feature in its app, and by partnering with payment bank licensee, it can integrate it with savings bank accounts via IMPS and NEFT transfers and issue ATM and debit cards.
FreeCharge’s new wallet will be available for third-party merchants and the company claims to do 200 million transactions annually. Snapdeal and FreeCharge together have 87 million registered users and allow them to use this wallet.
Flipkart is also planning to launch a payment service on its mobile apps in the next three months, and acquired a majority stake for a deal amount of Rs 45.4 crore in payment services startup, FX Mart, which owns a prepaid license issued by Reserve Bank of India (RBI). Cab hailing service, Ola had also started its own wallet service named Ola Money and plans to integrate its mobile wallet with Oyo Rooms, Lenskart, Saavn, among other startups.
Alibaba-backed Paytm is planning to establish a new entity named Paytm Payment Bank Ltd. for the payment services. It recently received a payment bank licence from the Reserve Bank of India, and the company already owns a prepaid wallet licence, claims to have more than 100 million wallet users in the country. With this initiative Snapdeal (combined with Freecharge) will come neck-to-neck with Paytm’s offerings, since Fino Paytech is also among the companies which received banking license from RBI.
The other players in the mobile wallets service are MobiKwik, PayMate, Oxygen, Citrus, PayU, and MoneyOnMobile among others. And, with this FreeCharge’s new digital wallet launch, the company claims to become the country’s largest mobile wallet in the next six months.