‘Aim for the sky’ seems to be the mantra of Freecharge’s Chief Operating Officer, Govind Rajan.
The dream of being the Operating System of digital payments
Rajan shared his plans with Business Standard, “Just like an android platform or Apple iOS, we want Freecharge to be operating system for payments. Our philosophy is to grow with partners. If the system grows, we will grow.” They plan to do it by collaborating with banks and vendors.
Goal is set, but there are few challenges on the way. To accomplish the OS dream, the company will have to convince sellers and SMEs to accept digital payments as a mode of transaction.
Elaborating further Rajan said, “The biggest issue is acceptance (of digital payments by traders). The experience of acceptance is the thing we need to crack. India is a hyper-competitive market. You just can’t go to a merchant and say ‘use digital payments’ to save costs. He wants his revenue to grow.”
Freecharge’s COO believes that cashless & paperless transactions with only mobile as the channel is the way to go. “Why should vendors require a device of $160 to accept payments? Payments should happen electronically. There is no need for device other than mobiles to accept payment. Our boundary condition, there is no investment for the retailer,” said Rajan.
On the other hand, Freecharge is crushing dreams of other digital wallet companies
Snapdeal acquired Freecharge in April and five months later, the marketplace launched Freecharge Digital Wallet. Speculations were on whether the marketplace will allow other wallet companies to do business.
Well, the mystery is solved, as it’s out in open that Freecharge is the only wallet present on Snapdeal as of now. It’s quite clear that ecommerce firms are going to pick their own wallets and are gradually disassociating with other digital cash-back firms.
Ankur Saxena, CEO of Oxigen revealed to ET, “We were present on Snapdeal before it acquired Freecharge and decided to take us down. At one point in time they did accept wallets but now all of them want to come up with their own wallets. There will definitely be an impact on the business because if the customer is not allowed to use my wallet on a particular site he will be forced to use another mechanism to pay.”
However, digital payments leader, Paytm believes restricting customers to one wallet and one marketplace is not a wise idea.
Nitin Misra, VP- Products, Paytm stated, “We have better acceptability and more consumers. Why would a customer put money in a wallet that can be used only on that particular site and the cash back too cannot be used elsewhere? In my opinion, the consumer is not dumb. If somebody does not wish to allow us as a payment option on their site it is entirely their call.”
We agree with Paytm’s view, as diversification is the key to success. Restricting a buyer’s options is never a good idea.