For Indians, the default setting is distrust: Kunal Shah

Kunal Shah, Co-Founder & CEO, FreeCharge
After Freecharge's acquisition by Snapdeal in April 2015 many expected to see the online mobile recharge service being integrated with the e-commerce platform.

For Freecharge, recharge is the core product and bill payments is an area where we see an opportunity to create various use cases for youngsters to come on board. Freecharge and Snapdeal are going to stay as separate apps. There is a fundamental reason behind this: there are transactions that we love to do and transactions that we hate to do. Transactions that we love to do are where we enjoy the purchase. For instance, buying a shirt could be seen as an enjoyable transaction vis a vis, say, paying bills or fueling a car. So Freecharge is going to focus on all transactions consumers hate to do but they have to do. Therefore our metric is to reduce the time taken to do a transaction that is not necessarily enjoyable.

On the contrary, when a user goes to the Snapdeal ecosystem, the focus is clearly on increasing the time spent by users on the platform with an objective of encouraging them to make a purchase. Both Freecharge and Snapdeal could be connected in the backend with common accounts, common wallet, common payment options etc but the two will continue to be two separate platforms as they serve different purposes.

How has the acquisition played out for Freecharge? Has the number of transactions the company is doing post its acquisition gone up or down?

We were at 20-25 million users when we got acquired and now Freecharge independently has crossed around 30-35 million transactions and the total combined transactions are somewhere around 90 million. We have probably grown 2x from the time we were at Freecharge and that number is constantly improving because a lot of incentives for Snapdeal customers are now being put in the wallet. For example, one of the current promotional offers on Snapdeal offers users Rs 500 cash-back on the purchase of electronics, which goes into the wallet and can be later used for recharges among other things. Initially, we were skeptical about an approach that involved digging into databases of Snapdeal and Freecharge for promotional offers. However, with a common account, we can successfully go ahead with such pollination.

What is going to be Freecharge's growth strategy here on? Will the company stay focused on recharge or bill payment only or does it plan to look at newer segments?

Digital transactions are what we will be focusing on. The way we draw the line is that all digital transactions stay with Freecharge and all transactions that require physical delivery go to Snapdeal. Our goal is to go after every transaction in the digital domain, starting from mobile recharges, bill payments to payment of school fees and purchase of railway tickets. Our goal is to have all digital transactions available at a one-stop shop.

Are there any new products you are planning to add?

Pretty much all types of bill payments and all metros. Freecharge has launched Mumbai Metro (smart cards recharges for local train travel), and we are expecting all other metros to go live very soon. The company is also looking actively at local railways to provide commuters monthly travel passes. Further, we are targeting major electricity, water supply and gas suppliers. The company is examining ways in which we can facilitate LPG payments and bookings online. Insurance is also a focus area for us. We want to have every digital transaction on our platform in the next six months. It doesn't matter how small or big that transaction or the market is, what's important is that we are present in all the markets.

What advantage does access to a wallet give a buyer?

The access to a wallet has boosted our ability to participate with more merchants than what we are currently doing. As a company, we see no reason to encourage people to pay electricity bills only through our platform. As an example, we are open to allowing our wallet to be used for payments on the Reliance Energy platform as well. Our idea is to get more and more people to move towards digital commerce. Even with a lot of curiosity around online selling platforms now, it's not natural and default for people to move to digital transactions yet. For a large section of people the habit is an occasional one and we need to make this mainstream. Unless we create digital habits and trust the industry we will never reach the volumes required to make an impact. Two things need to be looked into. First, one needs to take into account existing customers: are they transacting enough digitally? The second is, are more customers coming onto digital platforms?

So how does the industry go about building trust? First of all consumers are sceptical about online businesses and second there is the general issue of online security in a scenario that involves vital personal information.

Unfortunately, in this country, people are low on the trust factor and that is the reason it takes years for a person, company or a brand to earn consumer trust. For India, our default setting is distrust. Our distrust levels are so high that we empty the petrol tank before sending off our cars for servicing. The reality is that with consumers reluctant about adopting digital transaction, about 1 per cent of the gross domestic product remains locked up owing to the cash behaviour. The time has come when we as consumers have to learn to differentiate between companies that are genuinely trying to create digital transactions versus those that are out to take advantage of people.

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