The mobile wallet market is expanding its reach within the country given the user base of over 150 million smartphones. Despite the inherent simplicity and ease of use, the reach of digital payments is just 3% of the population. The two biggest challenges faced by the digital payment platforms in making the shift for consumers are habit and acceptance, feels Govind Rajan, chief operating officer, FreeCharge, a Snapdeal owned mobile wallet company. He says the core focus of FreeCharge will be on creating the right user experience to expand the market in an interview with FE’s P P Thimmaya. Excerpts:
How do you see the digital payment market in India?
There is no reason why every Indian who has a smartphone can enable a digital payment. Today, there are a lot of barriers in accepting conventional payment mechanism which are done through the point of sale machines. We believe that these barrier can be dispensed with digital payments. Our biggest challenge is that acceptance of digital payment is very low in India. Our goal is that no merchant in the country should invest even a single paise to start accepting digital payments and that is the only way this segment will grow. Today, our biggest focus is how to grow digital payment so that people move from habit of cash to digital payment. The biggest competitor we have now is cash and are still in the phase of market development. We need to solve two problems, that of habit and the second is acceptance.
How is FreeCharge expanding the digital payment market?
Our goal is to do all transactions within 10 seconds. Our job is to connect the customer and merchant. We are a technology company and not in the business of managing funds. Everything we are doing is to solve two problems: habit and acceptance. The smartphone user base is around 150 million and it will go up to 500 million, so the opportunities are unlimited. Creating the right experience is important so that people who once use digital payment they do not look back. Our retention rates are also very high. If the convenience and product benefits are clear then adoption is guaranteed.
Has the digital payment market reached an inflection point?
It would be difficult to say, though the inflection point is based on three things: number of use cases where consumers can pay, number of people having smartphones and the access to data that everybody has. If one can make the user experience compelling then digital payments should go through the roof.
How is the competitive scenario?
There are many digital wallet companies but only few of them have significant scale. Our view is to focus on the experience and not so much on promotions. It is user experience which will drive stickiness. Today, majority of the transactions are from the mobile recharge segment and rest are from various kinds of bills. We would like to reach 5 million merchants out of 40 million in the country in next 18 months. We are focused on getting as many use cases possible so that we can make the transaction simpler, efficient, and remove any friction between the consumer & merchant. The third thing is about partnership. Our model is not of having any payment bank, processing or being an aggregator. We would like to be the digital payment operating system (OS) of the country. We will support every merchant big or small including offline, online. Any use case that is the most frequent use is our first port of call.
How secure are digital payment transactions?
I would say transactions on the mobile are far more secure than any other form. There are hundreds of signals from a mobile where one can analyse. It is far easier to do risk management on the mobile rather than on the web and can build so many algorithms on the signals. Our OTP is available for just three minutes. We are going to disallow some features on the web and allow it only on the mobile.