Industry: Financial services
Taxi hailing service Ola, run by ANI Technologies Pvt. Ltd, has acquired mobile payments company Quarth, in an attempt to strengthen its mobile wallet service Ola Money launched in November last year. Quarth, which runs a mobile payments app called X-Pay, is Olaâ€™s second investment in the payment space. The company had picked up a minority stake in ZipCash Card Services Pvt. Ltd, a company which has a wallet licence from the Reserve Bank of India (RBI), in June last year. The move comes at a time when the so-called home-grown unicorn start-ups such as Flipkart Ltd and Snapdeal (Jasper Infotech Pvt. Ltd) are strengthening their payment business through acquisitions. Flipkart acquired a majority stake in payment services start-up FX Mart Pvt. Ltd in September last year, while Snapdeal acquired utility payment service company Freecharge for $400 million in March last year, in the biggest-ever consumer Internet deal in India. Olaâ€™s acquisition of Quarth was first reported by Techcrunch on Monday. â€œWith acquisitions like Quarth, we are investing in building seamless digital payment solutions. As we work towards our mission of building mobility for a billion people, we will continue to build the best in class payment experience for our users,â€ Anand Subramanian, senior director, marketing communications, told Techcrunch. Ola did not respond to an email seeking comment till the filing of this report. According to Techcrunch, the Android-only X-Pay app integrates with about 26 banks in India. Co-founders of Quarth Abhinav Srivastava and Prerit Srivastava will join Ola Money along with their present team. Ola Money can not only be used to make payments for Ola rides, but also for other online platforms such as online eye ware store Lenskart, hotel aggregator Oyo Rooms, music streaming app Saavn and hyperlocal electronics retailer such as Zopper. Such services throws open an additional revenue stream for Ola, with the ride hailing service still being loss making, and also puts the service in direct competition with bigger rivals such as Paytm and Freecharge. According to industry experts, an increased proportion of digital transaction will also help Ola drive efficiency in payments, as well as retain its existing user base by expanding use cases for them and cut down additional costs related to cash payments. To be sure, cash payment is still the norm in India, which prompted Uber Inc. to launch cash payments in the country to increase consumer base. Ola, which launched food and grocery delivery services last year, shuttered both verticals earlier this month to focus on its core offering of transportation. The move came amid growing competition from Uber, which claims about 50% of the Indian market. In July last year, Uber said the company will invest as much as $1 billion in India in six to nine months. Ola, which acquired smaller rival TaxiForSure in March last year to wrest market share from Uber, has so far raised close to $1.2 billion from Tiger Global management, DST Global and SoftBank, among others. The two companies have rolled out services such as ride sharing, carpooling and even bike taxis and have been slashing fares in an attempt to acquire customers. To be sure, Ola has a far bigger penetration in India with a presence in 102 cities, as against 29 cities for Uber.