While ride hailing services Ola (ANI Technologies Pvt. Ltd) and Uber Inc. strive for a pole position in the domestic ride hailing market, there is another battle silently brewing among wallet and payment service providers Paytm (One97 Communication Pvt. Ltd) and Freecharge to make the most of the taxi market, poised to reach $7 billion by 2020, as estimated by SoftBank.

Freecharge, which was acquired by Snapdeal in April last year for a whopping $400 million, said earlier this week that the company will enable cashless payments in at least 100,000 taxis by the end of this year, a segment where Paytm already has a strong foothold through its partnership with Uber.

Freecharge claims to have on-boarded about 15,000 taxis already to accept cashless payments through quick response codes in Delhi, Mumbai and Bangalore.

“Today’s consumers demand convenience and we are targeting sectors both in online and offline space which will influence the daily payment habit and shift them from cash to digital payments. We have dedicated teams in these three cities who are focused on providing training and helping drivers to register on Freecharge as a merchant,” said Sudeep Tandon, Chief Business Officer at Freecharge.

To be sure, while Paytm is expanding its foothold through the partnership with Uber, Freecharge is targeting the unorganized segment, not yet affiliated to any ride hailing app. Freecharge does not have a partnership with either Ola or Uber.

Paytm, which had started out as an utility bill payment and recharge service provider, got a shot in the arm through its partnership with Uber in November 2014, after the San Francisco-headquartered company was forced to shutter credit card payments in India after the Reserve Bank of India made two-factor authentication mandatory for credit card payments.

Cab rides is one of the biggest source of transactions for Paytm after mobile recharge. It’s one of the things that’s helped Paytm stay ahead in payments. It will be tough for Freecharge to crack this market given Paytm’s early lead, according to industry experts.

Paytm has also extended cashless payment facilities to grocery stores, food joints and autos, among other services.

To be sure, Ola and Uber control almost all of the point-to-point ride hailing market.

According to industry experts, Paytm and Freecharge also need to tap into the unorganised segment to reduce dependence on Ola and Uber.

Source: Mint