Ola has launched a postpaid service called Ola Credit which will let its users pay for cab rides a week (7 days) after they’ve taken them. As of now, the service is only available to select users, based on their transaction history and can be paid for using net banking, debit and credit cards and Ola Money.
With Ola Credit, Ola is targeting its frequent users and corporate clients. Pranay Jivrajka, COO at Ola, told MediaNama that users would not be able to use the app to book a ride until they cleared the dues. “People will pay, as for these set of people, paying back is nothing, as compared to not using Ola because of negative balance,” he added. With Ola Credit, Ola is essentially taking on the liability of its users not paying for an entire week, and will hopefully take into account the possible abuse with this service might cause.
.@nixxin Perishable inventory. Better than let taxis go empty due to lack of cash.
— Shashikant Kore (@kshashi) November 17, 2016
The company says that Ola Money is one of the most preferred modes of payment after cash and that via Ola Credit, it will see a large number of low value online transactions. Note that in February we reported that Uber was working on a closed wallet service in India.
Surge in Ola Money usage following demonetisation
Last week, Ola said that its in app digital payments wallet Ola Money, saw a 1500% increase in recharge from 8:30 – 12 pm on 8 November following the devaluation of Rs 1000 notes by the Indian government. For smaller towns and cities, which usually rely on cash payments, Ola Money growth was 30x. In November last year, Ola launched a separate Android app for Ola Money, which could do mobile recharges, money transfers and be used on other platforms.
Indian companies are trying to come up with new ways to deal with the current cash crunch in the country. After Rs 500 and Rs 1,000 notes were made illegal, ecommerce companies had to suspend cash on delivery orders, card payment systems witnessed a surge and went kaput for some time, mobile wallets saw high demand as people added money into them and wallets cut intra-wallet money transfer charges, other than the fact that people queued for long hours outside the ATMs even as ATMs ran out of cash to dispense.