FreeCharge has plans to speed ahead of Paytm. CEO says ‘our retention is not driven by discounts’

It’s been a long standing war between Paytm and FreeCharge in the payments space. Both backed by industry veterans and serious money, while Paytm is the current market leader, FreeCharge isn’t taking things lying down.

With India’s merchants waking up to the prospect of accepting new payment methods and the upcoming UPI (United Payments Interface) and payment bank rollouts, payment players now have a new battlefield to fight on.

In an exclusive interview with Business Insider, FreeCharge CEO Govind Rajan said promotions aren’t the way forward anyway.”Our retention is not driven by discounts. The whole objective of our promotions is to draw more consumers to our experience. That’s the best way to spend our money. I don’t think you can promote your way to building a habit. If you’re solving a real consumer need, they’ll stick with you. You can’t always be incentivizing”, he said. When asked how much (promotions) is enough, Rajan said they keep re-calibrating as the landscape changes every 6-10 months.

Rajan believes UPI will offer an added phillip to their business, “We’ll do whatever it takes to drive adoption faster. It’ll be a journey of 6-12 months to drive adoption. The target market segment for UPI is over 65%”, he said.

While Paytm has expanded its foothold through its partnership with Uber, FreeCharge has so far been targeting the unorganized sector.

When asked why it hasn’t considered a FreeCharge-Ola or FreeCharge-Uber partnership yet, especially when cab business is one of the biggest source of transactions for Paytm, Rajan says, “It’s only a matter of time. For a payment mechanism, it’s never the case of A or B, but A and B. We are moving in wherever we see faster traction.”

According to industry experts, the most popular mobile payment apps are the ones that look beyond pure payment. FreeCharge chooses to disagree. Its motto is to ensure you spend as little time on the app as possible. With a tagline that says ‘Lo Do Khatam Karo’ (get it done with, and quick), the company wears its ‘10-second payment time’ as a badge of honor.

FreeCharge has not applied for a payments bank license but has partnered with FINO, which has one, for last-mile reach and access to new consumers. In the next 6-12 months, the company will tie-up with merchants and retailers to build its network further.

FreeCharge claims they are doing close to a million transactions a day and growing 10-15% month-on-month. In the first few months of launch, the company crossed $1 billion in annualized GMV. It’s targeting 7 million daily transactions by the end of the year.