Axis Bank on Thursday said it has acquired mobile wallet FreeCharge for $60 million (₹385 crore) in an all-cash deal from its parent Snapdeal.
The deal, subject to regulatory approvals, marks the first acquisition of a digital payments company by a bank in India. Post deal, 200 FreeCharge employees will be absorbed by Axis.
The $60-million sale marks a significant erosion of value for FreeCharge, which Snapdeal had bought in 2015 for $400 million (₹2,500 crore) to shore up its online payments play.
For Axis Bank, which has been a leader in key payment modes such as mobile banking, credit, debit and forex cards and UPI payments, the deal could turn out to be a value addition — most of its peers have been unable to make inroads in the mobile wallet category.
“Payments are at the core of our retail strategy,” said Axis Bank CFO Jairam Sridharan. The bank will double its customer base after adding FreeCharge’s registered wallet users of 50 million, he added.
“About 75 per cent of FreeCharge users are below the age of 30 and up to 85 per cent of its active users access to financial services from a mobile device.”
“New age customers are digital-native, mobile-first, who prefer one-click payments products and anywhere banking,” said Axis Bank CEO Shikha Sharma, adding that the bank wants to leverage the agile nature of a start-up with the stability of a bank.