Paytm has reportedly signed a non-exclusive term sheet to acquire rival wallet player FreeCharge in an all-cash deal from Snapdeal, reports the Economic Times. The publication added that Paytm will be conducting its due diligence next week and if the deal goes through, the deal size was pegged at $45 million to $90 million. Note FreeCharge that was acquired by Snapdeal for $450 million in 2015 and at the time was one of the largest deals in the consumer Internet space in India. Note that MediaNama has not been able to independently confirm this development. Calls and emails to FreeCharge and Paytm were unanswered at the time of publishing, and we’ve written to them for comment. We will update once we hear from them.

Currently, Snapdeal is in advanced talks to sell itself to its e-commerce rival Flipkart and the sale of FreeCharge will ease some of the pressures. Its biggest shareholder, SoftBank, is leading negotiations for the sale and reports indicate that the deal could be valued at $750 million.

In February, Jason Kothari was appointed CEO of Freecharge, replacing Govind Rajan, in addition to his role as Chief Strategy Officer at Snapdeal. Kothari is seen as a Softbank appointee at the struggling ecommerce company, and he has played that role before: he was previously the CEO of another Softbank backed company, Housing.com, for over a year, and left around the same time that Housing was merged with Proptiger. Rajan had quit last Freecharge last month, after taking over as CEO from Freecharge co-founder Kunal Shah, in May 2016. Meanwhile, around the same time, Snapdeal laid off close to 600 people within the company’s logistics unit Vulcan Express, and FreeCharge.

Other suitors: Note that the non-exclusive term sheet will allow Snapdeal to be in talks with other players as well. Apart from Paytm, MobiKwk was in merger talks with the company as well, as reported by Business Standard.

There were several reports of PayPal trying to acquire FreeCharge from Snapdeal. But the talks fell through with disagreements over valuations.

Number of users: Note it is unclear what will happen to FreeCharge’s wallet service once it gets acquired. Paytm already has an existing wallet service and will now operate under its payments bank. Paytm has more than 218 million registered users and over 50 million merchants. The company claims that it is doing more than 10 million transactions a day.

Meanwhile, in recent press releases, FreeCharge has stopped disclosing its number of users and only says that it has “millions of registered users”. In 2016, FreeCharge claimed to have more than 30 million users and was competing with MobiKwik and PayU for the second spot in number of users.

Wallet licence: In 2016, FreeCharge got a wallet licence from the Reserve Bank of India (RBI). The company 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. The licence was issued to Freecharge Payment Technologies Private limited, previously known as Klickpay Payment Services Private Limited.  Klickpay was Snapdeal’s payment gateway solution which it launched in 2014. 

If the deal with Paytm goes through, it will probably have to surrender it licence to the RBI as CitrusPay did when it was acquired by PayU.