The third biggest private sector bank in India, Axis Bank, has officially signed an agreement with Jasper Infotech Private Limited to acquire a 100% stake in its subsidiaries, namely Accelyst Solutions Private Limited and FreeCharge Payment Technologies Private Limited, which together make up the FreeCharge brand and its digital payments business. The transaction is of course, bound by regulatory approvals and should be concluded by the end of September, 2017.
This is the first such acquisition of a digital payments provider by an Indian bank. FreeCharge will be acquired by Axis Bank for Rs.385 crore. Axis Bank has major payment methods like credit and debit cards, mobile banking, UPI payments and Forex payments. The bank has been taking steps towards encouraging digital acceptance in the country and has also setup the second largest merchant network in the country with more than 4, 33, 000 PoS (point of sale) machines. Axis Bank has been taking part in innovative payment based initiatives through its tie-ups with Kochi Metro, Samsung Pay and BMTC.
According to the CEO at Axis Bank, Shikha Sharma, the acquisition of FreeCharge is a testament to the bank’s determination to go ahead with its mission for digitizing financial services. FreeCharge is expected to significantly contribute in this mission according to her. According to the CEO and Co-Founder at Snapdeal, the parent company of FreeCharge, this deal has the potential to impact the core banking and digital payments space and will be a win-win proposition since it will allow Snapdeal to focus on its core e-commerce business while providing Axis Bank with the most innovative and agile technological capabilities for the financial services segment.
The Chief Strategy & Investment Officer at Snapdeal and interim-CEO at FreeCharge, Jason Kothari, will be resuming his position at Snapdeal while helping with this integration as well. FreeCharge has a pan Indian presence with more than 50 million registered users of its wallet and more than 2, 00, 000 merchants across the country. More than 90% of transactions are driven by its app and FreeCharge also has 75% of its users under the age of 30 years. 85% of active users also access financial services from a mobile device. Customers use the wallet for making payments for DTH, telecom and broadband recharges along with other utility payments like gas, electricity and water bills. They also use the app for paying for fuel purchases across IOCL and HPCL pumps, travel needs through IRCTC, Yatra.com, redBus and goibibo.com and food delivery and dining requirements at Swiggy, Food Panda, Zomato and Dominos. They also pay for event and movie tickets at Cinepolis and BookMyShow through FreeCharge and also for shopping needs across several online and offline merchants including Shoppers Stop, Pantaloons, McDonalds (West and South), Heritage Fresh, Barista and Café Coffee Day among others.