Snapdeal-owned digital payments company Freecharge has moved customers’ balances from a wallet powered by YES Bank to one owned by Freecharge Payment Technologies Private limited, the company informed customers via an email. It had launched its wallet operations in a partnership with YES Bank back in September 2015 when it did not have a licence of its own. This is a pretty common practice where a payments company partners with a commercial bank to get the requisite approvals to operate a wallet.
Snapdeal bought FreeCharge for a reported $450 million in 2015. It had applied for a wallet licence from the Reserve Bank of India (RBI) through a subsidiary known as Klickpay Payment Services Private Limited; in January 2016, the Klickpay was renamed to Freecharge Payment Technologies Private Limited (FCPTL). The RBI had granted a final approval in July 2016.
What happens to balance in the wallet?
FreeCharge’s email reads that customers will be given three options if they wish to opt out of the wallet from YES Bank:
– Consume the balance through purchases on merchants who signed on. Once consumed, customers need to write to email@example.com by January 25, 2017 from the registered email address to notify choice of opting out.
– Self-transfer wallet balance to a bank account. Customers need to enter account details and amount. The money will reflect in the account in 1-2 days. Customers need to notify Freecharge if they are opting out again.
– Transfer to bank account via Freecharge’s team which would take around 21 days. The care team will ask customers for bank account holder name, account Number and IFSC code. A copy of a cancelled cheque of the account will be needed along with a valid proof of identity and address.
What is missing now?
A look at wallet’s application shows that Freecharge Go, the virtual card on the wallet, has temporarily been disabled. The company mentions that it is undergoing a makeover. The virtual card was provided by YES Bank and MasterCard and could be used on all Indian websites and not just its merchant partners.
Users could log into their Freecharge wallets and generate the Go card, add money to it and use it for all online transactions. On generating the virtual card on the app, users can select ‘card’ on the checkout page of the website or app, copy or type the Go card number, validity and CVV, along with an OTP for transaction verification on a mobile number.
Note that both Freecharge and YES Bank have not current given information on how many customers are using the virtual card. MediaNama had written to the wallet company on January 3 when we had noticed the change. We are still yet to hear from the company.
In May 2016, YES Bank said it had issued 1.7 million virtual cards and claimed it was the largest issuer of such cards in the world on the MasterCard platform. The cards saw over 5,000 transactions daily with an average transaction size of Rs 350.