Delhi-based Snapdeal has decided to take on to Paytm, (mobile recharge platform) in the Indian market, to stand out in the online marketplace sector. Snapdeal is making a collaborative effort to catch up through its INR 2,900 crore acquisition of mobile recharge firm, Freecharge in April. Because of its huge untapped potential, the digital payments market is emerging as a crucial front.
RBI forecasts that fewer than 1% of the entire 30 billion utility payments and bills handled every year (estimated value approximately 7.4 lakh crore) are done electronically.
While banks dominate the market for all the electronic payments related to water, gas, phone, insurance premiums, internet and electricity bills etc, Snapdeal and Paytm have set for a face-off to back their services businesses.
While Snapdeal counts major investors among its backers, such as eBay, Japanese investor SoftBank and BlackRock; Paytm received a $575-million capital commitment from Ant Financial.
Both Freecharge and Paytm are known for their DTH and mobile recharge platforms. Paytm handles almost 50 million DTH and mobile recharge transactions per month, while Freecharge has at least 25 million customers. Hence, sources report that bill payments service is a huge opportunity to gain more customers.
According the cofounder of Citrus Pay, The banks dominated 80% of the electronic transactions, but now the private companies are focusing on the consumer experience, and thus, innovating.
Gurgaon-based Oxigen Services India and Mumbai-based Company are also competing to escalate in the digital payments market.