The move assumes importance in the wake of the government's decision to cancel old Rs 500 and 1,000 notes and the scarcity of physical cash that has followed.
Close to 500 e-challan devices have been rolled out to various traffic chowkies across the city at present, the Snapdeal-owned company said in a statement.
Once an offender is caught violating any rule, an e-challan will be generated against the vehicle registration number. The challan is also sent to person's mobile phone immediately.
The person can log on to www.Mumbaipolice.Net, enter their challan or vehicle number and pay for the fine using FreeCharge wallet on the payments page.
Mumbai traffic police has said it expects an annual increase of 8 lakh challans, from the existing 22 lakhs.
"Digital payments make the process faster and more efficient. Such partnerships are in line with our objective to make FreeCharge an everyday, everywhere option for our users," FreeCharge CEO Govind Rajan said.
The company said it is also in discussion with police authorities in other cities to enable traffic challans to be paid via FreeCharge.
Citing publicly available information, FreeCharge said the amount of traffic challans in metros is sizeable -- Delhi pays about Rs 140 crore annually, Mumbai about Rs 100 crore while Bengaluru collects Rs 70 crore.
Smaller cities like Ahmedabad collect nearly Rs 17 crore annually as traffic fines.
Besides, FreeCharge has partnered with Andhra to be part of the 'AP Purse' initiative of the state government.
'AP Purse' is a state government initiative to help consumers make convenient and effective use of digital payments, including mobile wallets. It is a folder which contains various payment apps and tools designed to enable citizens to start using digital payments in a ready and convenient manner.
Users and merchants can download the AP Purse and access and install the required apps.
"With more and more people using digital payments, there will be enhanced awareness on the ease and benefits of the same. At FreeCharge, we are proud to partner with the AP government in their mission to move payments from cash to digital currency," Rajan said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)