New Delhi, Dec. 20: E-wallet provider FreeCharge today said it would offer free insurance of up to Rs 20,000 to its users in case of phone theft or loss.

The company has partnered Reliance General Insurance Company to provide the additional security to its consumers as well as merchants.

"With this move, FreeCharge takes another step in proactively addressing the consumer concerns over the use and security of e-wallets, safeguarding the money in case of theft or loss of phone," said Govind Rajan, chief executive officer of FreeCharge.

"We have realised that the perception of wallet safety is critical to drive both the adoption and retention of customers and hence, we are offering this plan," Rajan said.

Under the wallet insurance plan, the underlying balance of all customers will be insured up to a limit of Rs 20,000 as long as the user is transacting at least once a month. In case of a loss or theft of the phone, all a customer needs to do is file an FIR within 24 hours and report the same immediately to FreeCharge via email or by calling its customer care.

FreeCharge, which is compliant with all applicable security standards, operates an in-house fraud and risk management system with more than 500 sophisticated algorithms and checks to keep the money safe, the company said.

"What we are witnessing is a digital revolution of sorts with an ever-increasing focus on digital payments instruments. In keeping with the times, an insurance product around the same was both needed and logical. Through our partnership with FreeCharge, we are taking a step in that direction and hope to play our part in the country's vision of going cashless," said Rakesh Jain, chief executive of Reliance General Insurance.

After the announcement of demonetisation, the government has been encouraging people to go cashless and make payments through e-wallets or plastic money.