Millennial users will help shape our Neo-Bank functions: Siddharth Mehta. by Freecharge

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SIDDHARTH MEHTA, MD and CEO of Freecharge, talks about the transition of the payment app to a fully-fledged digital financial services platform, the advantage of Axis Bank as the parent company and the expectations for the upcoming launch of Neobank

How have you experienced the development of the fintech sector in the course of your career at CITI Bank, HDFC Bank, Axis Bank and Freecharge since 2018? What major trends did you notice and what did you learn on site?

Fintech has evolved over the past 3-5 years, but most of the scope and innovation has sprung up around payments, which has been a core focus for the rapid growth in digital adoption. While payments will continue to make great strides over the next five years, Most of the innovations will take place around lending for both consumers and SMEs and we will see rapid scaling in this area with the availability of India Stack, account aggregator services, digital KYC solutions, etc. In addition, when it comes to lending, companies need to strike the right balance between size and risk.

How did Axis Bank, as the parent company, help Freecharge? What is the brand’s USP in terms of competition?

As part of Axis Bank, we have gained a competitive advantage in the fintech ecosystem. It helps us to introduce our digital offers much faster and also helps us with internal tests. If you are a standalone fintech player, it will be difficult to convince banks and NBFCs to integrate and adopt. With Axis Bank as the parent company, we tested so many products over the past year such as home loans, two-wheeler loans, gold loans, etc. We also partnered with Axis Bank to launch a digital FD (Express FD) product to provide consumers with a safe way to save and invest their money; This investment option, paired with mutual funds and digital gold products, offers consumers a comprehensive set of investment solutions on the Freecharge platform. The other advantage is the knowledge, experience and know-how of Axis Bank in the area of ​​risk and compliance, which offers added value in the long term and also becomes our USP.

Around 200-250 million people in India actually pay through digital modes. With 1.3 billion people in the country, the number can easily climb to 400-500 million in the next two years. So, There is enough space and opportunities for everyone. All you have to do is have a great customer experience and product, and that’s what we focus on. We have a huge portfolio of products ranging from FDs to Credit Cards and now the Pay Later offering and the upcoming launch of Neobanks is the latest.

Likewise, As Axis Bank is building digital capabilities and digitizing most of its banking services, Freecharge acts as a catalyst in this processwho helps the bank attract more new age customers and through offerings such as digital lending and neobank services.

Tell us more about your launch of a Neobank and your foray into joint development of products for millennials. What does the landscape look like for this population group and what potential do you see in it?

Neo-banks are the new disruptors in the block and offer convenience and personalization. The Neo-Banking feature is developed in collaboration with our users and is focused on New Age customers who want easier and hassle-free financial planning under one roof. This will enable them to help create a unique banking experience instead of forcing existing solutions to suit them.

We see a lot of young entrepreneurs looking to take control of their finances instead of just working to make money. With a digital and mobile way of thinking, this segment has great interest in fintech products compared to other segments, which is likely to continue in the years to come.

What are some of the solutions Freecharge introduced for small and micro businesses and merchants during the COVID environment? Which products have been accepted the fastest?

For our small business partners, we have introduced remote payment collection solutions to enable contactless remote payments so that they can continue their business smoothly. Today, in partnership with Freecharge, a small business can accept payments through cards, UPI and Netbanking using static and dynamic QR codes and / or custom payment links. In fact, we are growing more than 20% quarter to quarter in digital payments in small and micro business, using payment links and QR codes. Our products such as Paisa Plus, Khata and Payment Link have been developed with the needs of small retailers in mind. With Paisa Plus, retailers can issue their own digital shopping vouchers to their customers either as a reward or as a discount voucher. All of these efforts have resulted in continued growth on the retailer side over the past few years.

We also recently launched our small ticket lending product for SMBs, with loans ranging from Rs 5,000 to Rs 100,000 to merchants digitally. We’re subtracting a small amount from the daily payments we make to merchants for digital transactions through Freecharge, thereby relieving the EMI due date. We are also planning to introduce a neo banking platform for SMEs where you can find all your financial needs in one place.

How did Freecharge perform in FY20-21 in terms of growth?

Over the past year, we have taken some important steps on our way to transforming from a purely digital payments platform to a comprehensive digital financial services platform. We used to focus mainly on B2C customers, but now we are jointly developing financial products for B2C and B2B customers. In the merchant business, we are seeing an increase in remote payment solutions in the offline ecosystem and that business is growing Q-on-Q by almost 20% +. The pandemic made us reinvent ourselves. We recently launched various cashback and mega offers for the Christmas season, giving users the chance to win exciting prizes for using Freecharge Pay Later services with partner brands.

How different will your strategy in 2022 be compared to last year?

Our three core areas for consumers and SMEs are payments, lending and neo-banking. Our strategy for the next 12 to 18 months will not change from what we followed last year. We plan to offer our customers and trading partners the full range of services, ie payments, loans, investments, savings and insurance. In parallel, we will focus on expanding the lending business led by the Freecharge Pay Later and Merchant Cash Advance solution.

What are some of the challenges facing the brand and the industry?

As a brand, we are reinventing ourselves as a digital financial services platform. Establish Freecharge as a trusted financial services partner for consumers and SMEs will be one of our greatest challenges. While digital payments continue to grow rapidly in terms of both transactions and adoption, the margins are squeezed and that has an impact on the ability to invest. Even with the digital introduction, Cyber ​​fraud has increased and this affects customer confidence. In partnership with Axis Bank, we are continuously strengthening our systems and processes to counter this problem.

What is a principle or rule that guides all of your actions as a business leader?

The ability to communicate and connect with the team. Not only does it allow you to get involved on a personal level, it also keeps you updated on what is happening around you.

IN THE WORKPLACE

Siddharth Mehta began his career at Hyundai Motors and then moved to HDFC Bank in private banking. After spending a year at HDFC Bank, he moved to Citi Bank and began his journey into the world of payments. Since then, He has worked on a variety of innovative solutions for cards, merchants, wallets and public transportation. He joined Freecharge as Chief Business Officer responsible for its payments and trading operations and was named CEO of the company a year later.

BEYOND THE WORK AREA

“I’m generally a very comfortable person and like to spend time with my family and listen to soft music at home. But I like to travel and go on vacation whenever I have the opportunity, ”says Siddharth Mehta.

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Posted on: Monday October 25, 2021 12:01 AM IST


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