 "Snapdeal, FreeCharge launch mobile wallet")
The wallet enables users to have a single account and wallet for transacting on both Snapdeal and FreeCharge. Snapdeal had acquired FreeCharge in April this year. With this offering, Snapdeal aims to directly take on Paytm, leader in India's e-payment wallet space. Paytm began as a mobile wallet provider and then moved into e-commerce; it now competes with Flipkart and Snapdeal. With Snapdeal’s wallet, Flipkart is the only major entity here without a mobile wallet of its own.
To ensure they reach underserved areas of the country, FreeCharge has partnered with FINO, a payments bank licensee, in compliance with the Reserve Bank of India’s regulations on mobile wallets. It has also brought in YES Bank.
Interestingly, Chinese e-commerce major Alibaba is an investor in both Snapdeal and Paytm. While Snapdeal had secured funds from Alibaba Group last month, Paytm is backed by Alibaba’s Ant Financial.
Though the technology has been developed by a team from both Snapdeal and FreeCharge, the branding of the wallet has been done around FreeCharge, taking into consideration the latter's large and loyal customer base. FreeCharge has about 27 million registered users, with a 70 per cent repeat rate, at an average of five transactions a month.
“At FreeCharge, we have a large metro-centric customer base. Snapdeal has a large tier-II, tier-III customer base. There is a small overlap. Hence, it’s a huge opportunity when these accounts work together, where users can seamlessly transact across platforms,” said Kunal Shah, chief executive and co-founder, FreeCharge.
Snapdeal is also adding more cases for its customers to use the wallet across situations. It has partnered with Mumbai Metro — users will be able to recharge the metro cards through FreeCharge. “One more example of use-case that has been more or less largely covered by us is online payment of electricity bills. For this, we have partnered with various electricity boards,” said Anand Chandrasekaran, chief product officer, Snapdeal.
Snapdeal expects to see a significant reduction in the number of cash on deliveries with introduction of the wallet. In addition, both companies, along with other partners, looks to provide cashback worth Rs 1,000 crore in a few months through the wallet.
The companies have a combined number of annual transactions at 200 million, with about 87 mn users and 8.2 mn daily visits. Two of every three visitors transact on the platforms, with peak hour transactions as high as 2,298 a second. Snapdeal alone has 60 mn registered users and 200,000 sellers. Currently, it targets a gross merchandise value of $4 billion. At the current rate, the company will touch $4 bn in sales by September 2016.