Indian e-commerce retailer Snapdeal is set to sell its FreeCharge digital payments platform to private banking company Axis Bank.
An agreement was signed by the banking firm to acquire FreeCharge Payment Technologies and Accelyst Solutions, which both form the FreeCharge brand and are subsidiaries of Snapdeal's parent company Jasper Infotech.
The financial terms of the transaction have not been disclosed by either company.
The proposed acquisition is in line with Axis Bank’s portfolio of payment methods such as mobile banking, credit cards, debit cards, forex cards and unified payments interface (UPI) payments.
As part of its digital payment business, the bank has established a merchant network of more than 433,000 point-of-sale (POS) machines.
Axis Bank managing director and CEO Shikha Sharma said: “The acquisition of FreeCharge reaffirms Axis Bank’s determination to lead the journey of digitisation of financial services. We expect FreeCharge to contribute significantly in our aspiration to serve the digital native and mobile-first young consumers of India.”
FreeCharge has a network of more than 50 million registered wallet users and over 200,000 merchants, and users can make digital payments at retail outlets such as Pantaloons and Shoppers Stop, as well as beverage chains Café Coffee Day and Barista.
Snapdeal co-founder and CEO Kunal Bahl said: “The Axis FreeCharge combination is a potent one that has the potential to make a large impact on the digital payments and banking space."
In addition, media sources reported that a section of Snapdeal’s shareholders, including Tata Group chairman emeritus Ratan Tata, Temasek, BlackRock and Foxconn, has approved the acquisition proposal of its rival Flipkart.
Flipkart offered $900m to acquire Snapdeal, which is currently under consideration by the latter’s board.