Consumer use of mobile devices to shop both online and in-store is pushing merchants to adopt the use of digital wallets. The term describes electronic devices and programs used to make payments for purchases digitally, without presenting a physical credit card, debit card or cash. FreeCharge is the first company in India to introduce chat and pay for Person-to- person and Person-to-merchant interfaces for Digital Payments.
This extends to not only catering to diverse consumption needs but also building an ecosystem for seamless delivery of experiences – through technological support. This approach has resulted in 90% of FreeCharge business coming via mobile.
We spoke to Govind Rajan, Chief Operating Officer, FreeCharge about the growing relevance of digital wallets, FreeCharge’s future strategy, dealing with competition and more.
Tell us about FreeCharge's payment option service 'Chat-n-Pay.'
A First-of-its-kind technology innovation in the digital payments ecosystem, FreeCharge’s ‘Chat-n-Pay’ is an engaging and secures way of enabling social payments. The chat platform is a plug and play platform both for Person-to-person (P2P) and Person to merchants (P2M).
This new service is part of the latest version of the FreeCharge app. Customers can seamlessly chat and pay in a secure way to friends, family, and merchants in less than 5 seconds. It also enables direct buyer-seller Chat interface for merchants, small or large to accept digital payments in less than 1 minute after registering on the FreeCharge App. P2M option will help eliminate the hassle of acquiring a POS machine for small shopkeepers and start transacting digitally with no investment. It also enables the merchants small or large to upgrade their payment limit of INR 10,000 with necessary KYC verification.
The ‘Chat-n-Pay’ service will make digital payments most frictionless and expand FreeCharge’s digital payment ecosystem to include new users like neighborhood small shopkeepers, Taxi services and merchants from unorganized sector without any investment.
What is FreeCharge doing differently from its competitors in the same arena?
Cash is our biggest competitor, even today it is the primary mode of transaction in the country. FreeCharge is the only player which has an in-principal approval from RBI to launch PPI (prepaid instrument wallet) license. The FreeCharge Wallet was launched in September last year and has already reached 25 million wallet users. We are already witnessing a transaction of 1 million a day and aim to do 7 million transactions by the end of 2016. As per the latest report by Nielsen, we are already the No.2 player in the wallet category.
Our top most priority is safety and security of customer data and we offer the most intuitive platform for transactions. To ensure that our consumers have a safe and secure transaction experience, we have designed a home-grown technology- On-the-Go-Pin’ (OTP), which is aimed at making both online as well as offline transactions faster by cutting the delay caused in receiving the OTP through text message. The company has deployed a number of proprietary technologies to deliver best in class security, compliant with all major security standards such as PCI-DSS compliance. With the line slowly blurring between offline and online world, the need to create a frictionless customer experience for payments is of crucial importance. The FreeCharge Go (Virtual card), is helping in making our wallet ubiquitous in the online space.
One of the primary pull factors for the digital payment industry is the ease of use. FreeCharge focuses on creating the habit and has therefore spent a lot of time and energy in developing a super quick User Interface (UI). Over 99% of the transactions on FreeCharge are completed in less than 10 seconds and we want to be the digital payments operating system of the country.
In a country like India where people still heavily rely on cash payments, what do you think will be the future of mobile wallets?
There are challenges in every new thing you start and the solution is to make a habit change. We have seen if the benefit is large enough, consumers will switch in droves. FreeCharge aims to become the fastest, most convenient and rewarding one-stop-shop for payments that need to be made by consumers. By making the wallet swifter and safer than cash, we believe consumers will move to the digital wallet. The mobile Internet is creating a new economy and as it moves the value chain from offline to online, it is creating efficiency and providing infinitely more consumer choices. A revolution is quietly underfoot in India's economy. To shift customers from offline to online transaction habit - cash back offers, discounts and rewards are some of the great perks to induce the habit of digital payments; however, it is the user experience that drives them to stay with us.
The digital payments landscape in India has witnessed unprecedented growth largely driven by increased smartphone penetration. Initiatives such as Aadhaar, UPI will also have a catalytic effect on the industry. 3G and 4G services are being offered at extremely affordable prices, giving a huge boost to mobile commerce. Today, over 80% of new broadband-quality Internet connections are mobile driven and soon digital commerce will boom. We believe that digital commerce is growing each day and that the future is cashless.
How do you plan to market this product to the customers?
We have grown by leaps and bounds. Today, we are at 1 million transactions a day and aim to grow at an even higher pace and reach 7 million transactions per day by next fiscal. We also plan to spend Rs 2000 crore in cash backs and promotions in next 15 months to elevate the customer experience. We will be launching a slew of customer initiatives as part of the upcoming IPL to promote Chat-n-Pay among consumers.
Who are your prospective users? How do you see the small and medium enterprise (SME) market in India?
Our endeavour is to create a cashless society and bring about a change in the habit of consumers. For us, consumers and merchants, both are equally important. At Freecharge, we are continuously working on payment solutions that every merchant, large or small, can adopt without even investing a rupee. We envisage simple easy on-board system for new merchants. Keeping this in mind, we have patented our homegrown technology, ‘On The Go Pin’ which is safer and swifter than a standard static MPIN. Our technology fulfils the RBI’s mandate for two-factor authentication. With ‘On The Go Pin’, merchants can easily start accepting digital payments without having to invest additional money in the infrastructure.
The SME market in India is an ever-growing space. For FreeCharge, every merchant is important and contributes equally to the financial inclusion of the country. Our aim is to make FreeCharge wallet ubiquitous and FreeCharge Go has already helped us achieve this in the online space. By launching Chat-n-Pay, we envision every merchant small or big from paanwala, taxi vendor etc. to start transacting digitally by just downloading the FreeCharge app.