Private sector lender Axis Bank has decided to acquire digital wallet FreeCharge from e-commerce firm Snapdeal in an all cash deal worth ₹385 crore.
Axis bank said in a statement that it has entered in an agreement with Jasper Infotech Private Limited (which owns and operate Snapdeal) to acquire 100% stake in its subsidiaries.
These include FreeCharge Payment Technologies Private Limited and Accelyst Solutions Private Limited, which together constitute the digital payments business under the FreeCharge brand.
Axis Bank has a 5% market share which means 95% are not their customers indicating the opportunity to scale up.The acquisition will need approval from the RBI.
According to RBI regulations, any bank can have only one license for a prepaid payments instrument (PPI) like FreeCharge.
Since Axis Bank already have an PPI license, the lender have to surrender one of the licenses. Axis Bank wants to retain the FreeCharge brand.
FreeCharge- FreeCharge has over 50 million registered wallet users and over 2,00,000 merchants.
- FreeCharge wallet is used extensively to make payments for telecom, DTH and broadband recharges and for utility payments including electricity, gas and water bills.
- The wallet will incorporate Axis Bank products like digital savings bank account, instant loans, credit card application, buying insurance and mutual fund products, among others.
