Axis Bank-owned FreeCharge joins UPI ecosystem: Will it make a dent?

Eyeing the success of Unified Payment Interface (UPI), mobile wallet application FreeCharge has become the latest to join the unified payment bandwagon.

FreeCharge android app users will now be able to use all UPI payment services via their ‘@freecharge’ UPI ID, outlined the company's blog.

As payment and wallet companies are facing the heat of RBI guidelines on KYC, the announcement of UPI enabled facility from the Axis bank-owned company was expected to come.

FreeCharge, which was one of the hot property in recharge and wallet space, will join the likes of UPI-enabled digital payment players such as Paytm, PhonePe, Google Tez, and others.

Additionally, the battle to grab a major chunk of UPI's pie will also be fiercely fought as the aforementioned platforms have been betting big on the NPCI promoted payment product growth given its quick adoption.

As far as UPI growth is concerned, it has witnessed a massive month-on-month growth since its birth in April 2016. For instance, the UPI-based payments recorded 171.40 million transactions last month. Moreover, it has been giving a tough fight to plastic card based payment, including Debit/Credit card.

It could also help FreeCharge to bounce back in peer to peer and retail payment segments with the UPI wave. For uninitiated,  in April 2015, Snapdeal had acquired Freecharge for approximately $400 million as cash and stock deal.

Two years later, it sold the company in a mere $60 million to Axis Bank, which proved a big loss for the SoftBank-backed e-commerce marketplace.

Wallet business is gradually becoming redundant with the adoption of quick and easy to use democratic payment option like UPI. Currently, a large portion of UPI transaction is driven by peer to peer fund transfers.

However, with an integration of BharatQR code across all UPI-powered apps, its usages in retail payment space set to increase.

Besides local players majorly Paytm, PhonePe, MobiKwik, and Freecharge, Internet giant Google had joined the UPI while WhatsApp beta testing has been creating a furore amongst incumbents. It's likely to fuel the usage of UPI given its cemented 250 million userbase.

Certainly, UPI payment corridor has been the latest playground for global as well as local payment platforms. Indeed, it would be exciting to watch who outruns whom.

Also, a serious question to Sequoia-funded MobiKwik - what's holding it to join the UPI ecosystem? More importantly, is it in pipeline or it remains to be a pure play wallet company?

The development was first reported by ET.