There is no doubt that the future of the Indian economy is cashless: Sudeep Tandon

Retailer Media caught up with Freecharge's Chief Business Officer (CBO) Sudeep Tandon to understand the reason behind this explosive growth of mobile payment usage in the country.
Sudeep Tandon, CBO, Freecharge

India is experiencing a phenomenal growth in the segment of mobile payments in recent times. With the ever-increasing smartphone and internet penetration across the country, mobile payment endeavours have successfully managed to change the payment habits of consumers. Significant splurge in mobile payment adoption has led to a disruption in online payment vertical and many solution providers are now betting at innovative technology which can enhance user experience by making their transactions seamless.

Doing the same is Freecharge, a name that needs no introduction when it comes to online payment. Freecharge has successfully managed to take digital payment industry to a whole new level. Sahil from Retailer Media caught up with Freecharge’s Chief Business Officer (CBO) Sudeep Tandon to understand the reason behind this explosive growth of mobile payment usage in the country.

Do you think India is moving towards being a cashless economy? 
Less than 5 per cent of transactions in India are cashless. Just as consumers have shifted from snail mail to the internet for commerce, so will it be for payments and this is where digital wallets come in. We at Freecharge believe that the digital wallet will transform not just payments but commerce by connecting consumers and merchants in so many different ways.

How has FreeCharge contributed towards making India cashless?
Since our wallet launch, we have seen a massive growth primarily driven by high user retention and loyalty. We believe our great user experience coupled with compelling features allows merchants to accept digital payments at no additional cost. In fact, we are working with merchants nationally to help them adopt mobile wallets and inculcate a habit to fast track India into a less cash economy. Our aim is to be available at over 5 million merchants from both organised and unorganized sectors in the next 18 months and get them to start accepting digital payments. We are currently doing 1 million transactions a day and plan to do 7 million transactions a day by 2016-end. 

How do you analyse the trend in tier II and III cities of the country? 
We foresee both online and offline payments will rise depending on consumer needs and the nature of the transaction. We at Freecharge launched features such as on-the-go-pin and chat-n-pay are for peer-to-peer transfer and person-to-merchant payment. It is meant for merchants in the unorganized space who do not have the means to accept the payment.  The chat-n-pay feature is finding wide acceptance among taxi drivers, salons and Kirana stores with almost 45 per cent of our customer base using it. At Freecharge, 85 per cent of the transactions take place through the app and 15 per cent through desktop and web. Currently, the wallet can be used to pay at over one lakh merchants, including both online and offline segments. About 50 per cent transactions are from tier-I cities and rest from tier-II and tier-III.

What are the major roadblocks of the industry and how to you plan to overcome them?
India remains a cash led country in transactions. There is an overwhelming preference for physical cash, even in urban cities despite the available alternatives. Another challenge that digital wallets are facing is the lack of acceptance across many used cases. As we create a simple easy to integrate technologies to onboard new merchants, there will be a rise in use cases further increasing the salience of digital payments. Converting cash into digital money is another major challenge towards the adoption of digital wallets. It should be as simple as handling cash both for the consumers and the merchants. The adoption of wallets also needs to be incentivized initially and there should be common operating standards for everyone.

How do you plan to overcome these roadblocks?
So, there are challenges in every new thing you start and the solution is to make a habit change. We have seen if the benefit is large enough, consumers will switch in droves. By making the wallet swifter and safer than cash, we believe consumers will move to a digital wallet. The user interface is super important so is a secure, swifter mode of payment than cash. There is no doubt that the future of the Indian economy is cashless.

Where do you see the future of mWallet and eCommerce industry together 3-5 years down the line?
We are working towards creating a habit and will see the industry recognize the importance of habit commerce. Commerce is a two-way street. It’s all about partnerships and we are creating an ecosystem of partnerships to help consumers and merchants move from cash to digital payments.

Sudeep Tandon