Digital Wallet will Transform Not Just Payments but Commerce

The COO of FreeCharge Govind Rajan (also CSO of Snapdeal) talks about why wallet service is the next big thing and how FreeCharge is trying to get consumers move from the habit of cash to e-cash.

Do you think mobile wallet service is set to boom? The smartphone is connecting us economically in ways never imagined before. Mobile wallet is just the beginning of the coming 2nd internet revolution. Mobile internet usage in India is exploding. As per latest market study India will have 236 million mobile internet users by 2016, and 314 million mobile internet users by 2017, according to IAMAI & KPMG report released in July 2015.

We are now moving from a predominantly 2G network to 3G everywhere, and 4G is round the corner! Over 86% of transactions on FreeCharge are already from mobile!

The other truth of today is the fact that we all are time poor. We want to spend our time doing meaningful things. Not standing in a queue. The cost of cash transaction is not just time, cash transactions actually cost a lot of money – estimated to be over 1% of GDP.

Less than 5% of transactions in India are cashless. Just as you don’t have snail mail, increasingly turn to the internet for entertainment, turn to the internet for commerce, so will it be for payments, and here is where digital wallets come in.

FreeCharge Digital Wallets are better than cash in numerous ways.  Freecharge wallet is more secure, the transactions are faster, and give you instant real time access to all your money - so much more convenient for customers.

We believe that the digital wallet will transform not just payments but commerce by connecting consumers and merchants in one click.

What’s the m-commerce market size? What’s your current subscriber base and number of transactions they make monthly? We believe that the mcommerce industry could be $20 Billion by 2019, a CAGR of over 55%. We are already seeing the traction in m-commerce. As mentioned earlier over 80% of transactions done at FreeCharge are already from mobile. With 87 million combined registered users between Snapdeal and FreeCharge, 8.2 million daily users, 4 million engaged hours, 15 million stored cards, combined with Snapdeal’s GMV of USD 4 billion, the FreeCharge Digital Wallet is set to become India’s most used wallet in the next six months.

What are your top areas for investment moving forward? Our focus is on building habit commerce in India. To get consumers to move from the habit of cash to e-cash. Habit creation is our primary goal. To create this habit the consumer experience needs to be much better than cash – faster, more secure, and more rewarding. We already know how to create habit, Over 60% of our consumers are monthly repeat, with an average of over 5 transactions a month. 2/3 visitors end up transacting, which itself is a record!

Also Read: Is Omni-Channel Strategy the Way Forward for Retailers?

To accelerate this habit formation we intend to be the most rewarding wallet. We have earmarked over a 1000 Cr in various consumers incentives over the next 12 months to be the most rewarding wallet.

We believe the critical task in payments is to enable the ecosystem. It’s the digital ecosystem vs cash, one player cannot make the transformation happen. Our partnership with FINO will leverage this infrastructure to reach these remote areas, a wholly new sector for us to cater to. FINO has years of experience in reaching, managing the infrastructure in remote areas, in creating a payments backbone for these remote areas. We are a technology company with proven success. For example we have handled a peak load of over 2300 transactions a sec!  Our wallet is enabled with the latest in tech, HCE NFC BLE and QR code, and various new technologies we are exploring. Our partnership with FINO will leverage this infrastructure to reach these remote areas, a wholly new sector for us to cater to.

We strongly believe partnering with others is key, one cannot fly solo. We believe to progress, you need a deep culture of partnerships.

What are the top roadblocks to m-commerce in India? Can mobile wallet become truly mainstream? Yes, Digital Wallets will be the future of money in India. It is too early to talk about roadblocks. We are in the making of creating habits and with the adoption of smartphones we see the market growing tremendously.

Three areas you are working upon to make your mark in mobile commerce enduring? We are working towards creating habit and foresee 2016 to be the year when the industry will recognise the importance of Habit commerce.  Commerce is a two way street. Its all about partnerships. We are working with merchants to deliver a superior experience for them. Also, we believe that our twin perpectives – that of a merchant from our Snapdeal experience and Payments expertise from our FreeCharge experience will give us the twin perspectives needed to make commerce work, from both ends.  This is a much proven model – e.g. Taobao and Alipay in China, Ebay and PayPal in the US.

Are you working to innovate on technology front to make mobile wallet more permeating to users’ devices? We aim to make the FreeCharge Wallet more user friendly with best of technologies integrated. Our wallet is enabled with the latest in tech, HCE NFC BLE and QR code, and various new technologies we are exploring which will make transactions faster for our customers.  A number of new technologies are being road tested. We will make some announcements soon.


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