FreeCharge’s Chat n Pay is great…but for whom? #JustSaying

In case you don't know, in line with the craze of everything going social, FreeCharge today launched 'Chat and Pay', a digital payment solution geared towards Person-to-Person (P2P) and Person-to-Merchant (P2M) payments. The free service will be available as an update on Android, iOS and Windows as an update over the next few weeks.

FreeCharge aims to bring 5 million merchants onto the platform over the next 18 months. COO Govind Rajan told me Kunal (Bahl) might even find the target to be too small. Ummm…I just see a big problem. In terms of reach that is.

Now, with the default limit for Person-to-Person transfers being Rs. 10k, while you can extend it with KYC, no merchant with significant volume will find this useful. Also, no one chats when it comes to money. It’s always ‘paise de, katt le’ (pay and leave). So to put it in layman terms, the service maybe geared towards a newspaper-wallah, a kirana store, or towards paying a friend after a night out. Fair enough.

Be with me as I explore the situations I might find this useful. I’ll tell you why very soon.

Me to Mini Boutique/Cafe:
Imagine walking down a street without your wallet, whiffing out your smartphone at the counter and paying for your coffee. Awesome?

What’s Hot:
· No monthly transaction limit.
· No joining fees for Café.
· They can choose if money goes into their Wallet or Bank account.

What’s Not:
· Who’ll convince the Café to use social pay?
· How do you know which Café where accepts social pay?
· Why should a Café use this over POS? There aren’t many people asking for it!

I remember seeing an ad where a guy has no change to pay for his auto ride. The auto-wallah smiles and says he accepts wallet payments too. Has that ever happened with you? Never happpened in my case.

Govind says: “If you register as a merchant, there is no upper limit as the money goes into the bank acc. If the money goes to the bank, RBI laws apply. If you want the wallet limit to be expanded to Rs. 1 lakh, you can pay the requisite fees and we’ll get it done.”

Me to Paper-wallah/Kirana Store:
I live alone, i.e. I’m the man of the house. I hate bill payments. Imagine if I could automate my monthly broadband (local connection), newspaper and bread-milk bills. Great idea?

What’s Hot:
· I get notifications before and on due date.
· Payment at the touch of a button.
· I can use the money I might have saved in a wallet.

What’s Not:
· Language Support. My newspaper vendor might not understand English.
· Which Kirana’s cool enough to accept wallet payments? They want ‘cash in hand’, and not their money ‘tied in some wallet’.
· Does it make sense to transfer Rs. 39(Milk+Bread per day) via digital wallets? Not all Kiranas operate via monthly credit. Also, consider that there will be a 1-2% service charge in the near future. You can always fund this model via VC money though.

Govind says: “Now that we’ve brought Indic languages to Snapdeal, it’s only a matter of time that we bring it to our other products. India’s a very numerically literate. Everybody understands numbers and can quickly calculate.”

Me to Friend:
Me and a college buddy go to a bar. He gets sloshed, I’m sober (I don’t drink, and I live in Delhi. Don’t judge me). I pay the bills, and drop him home. Cut to end of month. I’m broke, and want that money back. I ask him on FreeCharge for my money, and he reluctantly parts.

What’s Hot:
· ‘Remind’ button, kind of like Poke on Facebook
· Money can be transferred directly to my bank acc
· Instant transfer (and I withdraw instantly).

What’s Not:
· Who chats on Flipkart/FreeCharge?
· What if he uses Vijay’s Paytm? That guy offers cashback. How do I get my money back then?
· My friends don’t want to pay money back anyway. Will digital extortion work?

The point of the Hot or Not exercise is to point that while the service may be free for a while, a paltry 3% of India’s payments are digital. That means not many people might already be onboard to drive the ecosystem at a micro transaction level. This ain’t no WhatsApp, son.

Till that happens, try convincing the hairy Kirana uncle, or the grumpy auto driver to accept you ‘digital wallet’ payment. In Govind’s words, “get the habit going”. However, if you live in a locality where the uber vegetable vendor sends a list of vegetable prices on WhatsApp every morning, the laundry boy accepts wallet payments, and the local kirana lets you buy that chocolate bar with the cashback you earned, I envy you.

Wait, property prices are going up too, right? DAMN! #ForeverBroke

Image credit: Indiatimes