Users of Axis Bank-owned digital wallet Freecharge will now be able to access the base of merchants on PhonePe’s service as the two rivals struck a deal in order to take on payments giant Paytm.Freecharge before being sold off to Axis Bank was owned by Snapdeal and was an arch rival of Flipkart owned PhonePe. After the USD 75 million sale, Freecharge has been seen as floundering, and has been struggling to keep pace with its rivals in signing up new users and merchants.“We are delighted to partner with FreeCharge and offer our customers the option of using their Freecharge wallet inside the PhonePe app. This is in line with our vision of making PhonePe India’s first truly open payments platform,” said Hemant Gala, Head of Banking Products and Strategic Partnerships at PhonePe, in a statement.The partnership will help PhonePe acquire new users as all Freecharge users will be required to have a PhonePe account.
Freecharge on the other hand will gain access to a growing base of merchants both online and offline, helping it retain users.The Freecharge Wallet will function as any other payment option within PhonePe. Currently the Flipkart company allows customers to make payments directly from their bank accounts through UPI (Unified Payments Interface), allows them to link their debit and credit cards and also load money into a PhonePe wallet.The coming together of the two rivals is seen as a move to combine forces and take on giant Paytm. While PhonePe claims it has a base of 45 million users, Paytm in August said it had over 230 million users on its platform. Freecharge too had a base of just 50 million users at the time of its acquisition by Axis Bank.“We are excited by this partnership, which enables FreeCharge customers to shop at various offline and online partners that PhonePe has tied up with, especially at popular online shopping destinations such as Flipkart, Myntra, eBay and Jabong,” said Sangram Singh, CEO of FreeCharge. PhonePe is riding off the back of UPI to tap customers who are looking for the ease of a digital wallet but who want to store their money in traditional bank accounts. Paytm, seeing the way UPI payments have taken off, has introduced the payment mode for customers on its own service. - Business Standard