Online cab hailing service TaxiForSure has revamped its mobile application and will now allow customers to pay through their Paytm wallets. Note that in October 2014, TaxiForSure had launched its own in-app wallet to offer cashless rides. The company says that the TaxiForSure wallet will now be used for credits which customers can earn through company-led promotions.
Customers will no longer be able to load money into TaxiForSure’s wallet and all existing money which was loaded into it will be stored as credits which can be used. TaxiForSure does not have a licence from the Reserve Bank of India (RBI) to operate a semi-closed payments instrument. TaxiForSure told MediaNama that its in-app wallet is closed payments instrument, similar to Ola’s in-app wallet. Customers will also be allowed to pay through cash.
TaxiForSure mentioned that it decided to shift to Paytm’s wallet as it would give access to the payment service’s 70 million customers. Arvind Singhal, CEO of TaxiForSure post its merger with Ola, told the Economic Times that 80% of the company’s bookings come from the mobile app and 35% of the transactions are settled through the wallet.
The RBI says that closed wallets are issued by a company for facilitating the purchase of goods and services from an establishment. These instruments do not permit cash withdrawal or redemption. As these instruments do not facilitate payments and settlement for third party services, issue and operation of such instruments are not classified as payment systems.
Note that rival Uber also uses Paytm’s wallet after the RBI cracked the whip on companies violating the two-step authentication for card not present transactions. However, Uber does not allow cash payments on its service.
TaxiForSure expansion: Earlier in April, Ola had raised $400 million n a Series E round of funding led by DST Global, with participation from GIC, Falcon Edge Capital and existing investors. Of the $400 million, $ 100 million was earmarked for TaxiForSure. Ola’s director for marketing communications Anand Subramanian said that since TaxiForSure has always been focused on the economy segment its services perfectly complements Ola’s services, and hence the decision to allocate new funds and help TaxiForSure expand further.