FreeCharge Denies Reports of Stake Sale to PayPal

FreeCharge Denies Reports of Stake Sale to PayPal
Highlights
  • Reports said FreeCharge was in talks to sell a 25 percent stake to PayPal
  • FreeCharge has issued a denial on the reports of stake sale
  • FreeCharge has called the reports "speculative" & "completely incorrect"

FreeCharge has denied reports circulating in the Indian media regarding the company selling a 25 percent stake to PayPal for approximately $200 million. A FreeCharge spokesperson in a statement denied the reports and said, “There is no basis to a speculative media story about FreeCharge and PayPal being in discussion about a stake sale. There is no such discussion/ proposal and the story is completely incorrect.”

This statement quells the rumours of FreeCharge selling a stake in its online payments division to PayPal. Reports last week had said that global digital payments giant PayPal had initially offered to buy a controlling 51 percent stake in Freecharge.

(Also see: How to Transfer Money From FreeCharge Wallet to Bank Account)

Last week, PayPal appealed to Indian authorities to block Paytm’s pending trademark application on the grounds that the latter’s logo is "deceptively and confusingly" similar to that of the former. 

PayPal in its notice said, "The impugned mark sought by the applicant [Paytm] is deceptively and confusingly similar to the opponent's earlier trademark in as much as applicant has slavishly adopted the two-tone blue colour scheme of the opponent in its entirety." PayPal has claimed that it has been using its trademark since 1999 and is registered in all countries where it operates, including India.

Paytm is the biggest online payments platform in India, and competes with FreeCharge and MobiKwik. Both Paytm and Snapdeal – parent company of FreeCharge – have received funding from Chinese e-commerce titan Alibaba.

The digital payments segment of India has enjoyed unprecedented growth since the demonetisation of Rs. 500 and Rs. 1000 notes on November 8. Less than 10 days after the demonetisation drive, Paytm announced that it was adding 20,000 new merchants a day on its platform, against the 10,000 new merchants it added every day before the old Rs. 500 and Rs. 1000 notes went out of circulation. 

Similarly, FreeCharge said its app downloads had increased 200 percent, and that its wallet on delivery service crossed 100,000 deliveries within a week of launch. MobiKwik said the amount of money. It added that the value of transactions using FreeCharge Wallet went up by 1500 percent and volume of transactions increased by 900 percent over the previous month.

Disclosure: Paytm's parent company One97 is an investor in NDTV's Gadgets 360.

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