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New Delhi, Jun 26 () Flipkart-owned PhonePe on Friday said it has partnered with ICICI Bank on UPI multi-bank model, giving its users the option to create and use multiple UPI IDs with ICICI and Yes Bank's handles. "PhonePe has partnered with ICICI Bank on UPI multi-bank model giving its users the option to create and use multiple UPI IDs with ICICI Bank's '@ibl' handle and YES Bank's '@ybl' handle on the PhonePe app," a statement said. This addition, in partnership with ICICI Bank, enables quick and contactless payments to over 200 million registered PhonePe users, the statement added. In March, PhonePe had suffered a service outage for nearly 24 hours that had started after the Reserve Bank of India (RBI) placed Yes Bank on moratorium at that time. Its team had worked overnight with the National Payments Corporation of India (NPCI) and ICICI Bank to ensure all its services are up within a day. PhonePe, at that time, had said it was working on adding more payment service provider (PSP) partners to offer its users more options for UPI transactions, even as it continued to engage with Yes Bank. "At PhonePe, our effort has always been to give customers more choice while making their transaction experience seamless. Offering the '@ibl' handle to the users on our platform further solidifies PhonePe's already fruitful association with ICICI Bank," PhonePe Vice-President (Financial Services and Payments) Hemant Gala said on Friday. With customers now being able to choose between multiple handles for their UPI IDs, PhonePe has achieved another key milestone in its journey towards making payments easy, secure and accessible to all, he added. Bijith Bhaskar, head (digital channels and partnership) at ICICI Bank, said that with an increase in adoption of digital payments, ICICI Bank is partnering with PhonePe for extending UPI services. "We believe that with this partnership, both ICICI Bank and PhonePe would be able to capitalise on their immense domain strengths for empowering customers to a seamless and simple digital payment experience," he added. The new version of the app to add or create ICICI Bank's UPI ID will be gradually rolled out to the users in the coming weeks, the statement said. SR HRS

PhonePe partners with ICICI Bank on UPI multi-bank model

The National Payments Corporation of India (<keyword id="193629" type="COMPANY" weightage="20" keywordseo="NPCI">NPCI</keyword>) on Thursday allowed Facebook-owned messaging platform <keyword id="790242" type="COMPANY" weightage="20" keywordseo="WhatsApp">WhatsApp</keyword> to start its payments service in the country in a "graded" manner. The announcement by NPCI came minutes after it limited a single third party like WhatsApp or its rivals like Google Pay or Walmart's <keyword id="6357886" type="COMPANY" weightage="20" keywordseo="phonepe">PhonePe</keyword> to handle only 30 per cent of overall <keyword id="6358921" type="COMPANY" weightage="20" keywordseo="upi">UPI</keyword> transaction volumes by putting a cap. NPCI runs the <keyword id="2736678" type="COMPANY" weightage="20" keywordseo="Unified-payments-interface">Unified Payments Interface</keyword> (UPI) used for real-time payments between peers or at merchants' end while making purchases. Having a cap on the transaction volume will help in de-risking the entire set-up and is essential as UPI, which surpassed two billion transactions a month mark in October, grows further, NPCI said in a statement. <div type="Article" hostid="261" msid="73030004" title="What is UPI and how does it work?" mstype="2" mssubtype="0"></div> The industry has been feeling that allowing WhatsApp into payments may drive up volumes in the Indian digital payments space. In China, Wechat alone has over 1 billion active users for its payment services. WhatsApp has 400 million users in India while other Third Party App Providers (TPAPs) -- Google Pay had 75 million and PhonePe had 60 million -- as of May. WhatsApp has been running a pilot service for the last two years but was not given a formal go-ahead because of data localisation requirements. "NPCI has given approval for Whatsapp to 'Go Live' on UPI in the multi-bank model. WhatsApp can expand its UPI user base in a graded manner starting with a maximum registered user base of twenty (20) million in UPI," the statement said. NPCI issued two separate statements on WhatsApp and on limiting the transaction volumes. A "cap of 30 per cent of total volume of transactions processed in UPI" will be applicable on all TPAPs from January 1, 2021, NPCI said in a statement. "It will help to address the risks and protect the UPI ecosystem as it further scales up," it added. The cap of 30 per cent will be calculated on the basis of the total volume of transactions processed in UPI during the preceding three months on a rolling basis, as per NPCI. According to the statement, existing TPAPs exceeding the specified cap will have a period of two years from January 2021 to comply with the same in a phased manner. It can be noted that the TPAPs typically tie-up with banks at the back-end to add users and process payments for them. Data coming out of the usage is a major resource, apart from the revenues made through processing fees. SEE ALSO: <a href="https://www.businessinsider.in/tech/how-to/what-is-upi-and-how-does-it-work/articleshow/73030004.cms">What is UPI and how does it work?</a>

WhatsApp Pay UPI services gets the green signal from NPCI, but rollout will be in a 'graded' manner

Mumbai, Mar 9 () After the impact on payments systems following moratorium on Yes Bank, the National Payments Council of India (NPCI) on Monday said it had in 2017 advised third-party apps to have a multi-bank approach. PhonePe's exclusive reliance on Yes Bank to act as its payments partner had resulted in the popular app being unable to render Unified Payment Interface (UPI) transactions for a day last week. "NPCI has been a proponent of the multi-bank model, to ensure full resilience of the ecosystem... In September 2017, NPCI advised large UPI payment app providers for a multi-bank approach," an official statement said. It added that there are already few payment apps operating on the multi-bank model and some of them are in the final phases of migration. Following the service outage, PhonePe switched to ICICI Bank and was able to restart its UPI services late on Saturday. Meanwhile, NPCI, whose role has been welcomed by both ICICI Bank and PhonePe for the help, also appreciated the efforts undertaken by the system for showing the "highest sense of the consumer first approach". NPCI said the last-leg payment service providers also prefer to work with multiple parties to ensure high availability of payment systems, and where required, the payment providers identified alternative partner banks who quickly stepped in to address contingency requirements. The Reserve Bank of India (RBI)-promoted body said payment systems have had "minimal disruption" and non-Yes Bank customers can make payments for all their daily requirements. The difficulties to the system had also come at a time when the RBI is mulling to open up the role played by NPCI to private parties because of concerns over concentration risk. AA HRS

'NPCI advised UPI payment apps to have multi-bank approach in 2017'

<keyword id="6357120" type="General" weightage="80" keywordseo="paytm" source="Orion">Paytm</keyword> Founder <keyword id="914589" type="General" weightage="50" keywordseo="vijay-shekhar" source="Orion">Vijay Shekhar</keyword> Sharma has said it will be "humbling to see Japan's Paytm-powered PayPay to soon be enabled for our home users" after Japan's Minister for Digital Transformation Taro Kono said that the island country is "seriously thinking about joining the Indian <keyword id="6358921" type="General" weightage="100" keywordseo="upi" source="Orion">UPI</keyword> payments system". India's mobile payments revolution has been making waves globally and has become a model for other countries as they take steps towards digitisation. After Singapore's integration in the UPI network, Japan is also considering a similar move. In an interview, Japan's Minister for Digital Transformation has said that Japan is "seriously thinking about joining the Indian UPI payments system". Pioneer of India's mobile and quick response (QR)-based payments, Paytm's Vijay Shekhar Sharma on Saturday welcomed this news and expressed his delight and pride over this. Paytm founder on Saturday took to the micro-blogging site, Twitter, and, said that with Japan working on integration of UPI, it will be "humbling to see Paytm powered Japan's largest mobile payment system" @PayPayOfficial enabled for our home users". The Fintech giant launched PayPay in 2018 with SoftBank and <keyword id="378763" type="General" weightage="50" keywordseo="yahoo-japan" source="Orion">Yahoo Japan</keyword>, empowering the country with cashless transactions. PayPay leverages Paytm's technology to drive mobile payments in Japan and has in fact seen immense popularity. Vijay Shekhar Sharma tweeted: "Very proud to see Japan working to integrate with India's global pride @UPI_NPCI system ! It will be humbling to see Paytm powered Japan's largest mobile payment system @PayPayOfficial enabled for our home users. Thank you @AshwiniVaishnaw sir @konotarogomame " India and Singapore on February 21 linked their respective online payments systems -- Unified Payments Interface (UPI) of India and PayNow of Singapore -- for seamless cross-border transactions between the two countries. The virtual launch function was attended by Prime Minister Narendra Modi and Singaporean counterpart Lee Hsien Loong. The linkage of these two payment systems of both countries would enable residents of both countries to the faster and more cost-efficient transfer of cross-border remittances. People in both the countries will be able to send money real-time via QR-code based or simply by entering mobile numbers linked to the bank account. Paytm has been instrumental in India's digital transformation through its innovative solutions like QR-code and Soundbox. The company has taken UPI to every nook and corner of India. Paytm Soundbox is an audio-assisted smart device which provides instant notifications when you receive a payment. It is a small portable speaker for your daily payment alerts which comes with a SIM-based connectivity. SEE ALSO: <a href="https://www.businessinsider.in/sports/news/here-are-the-star-batsmen-of-ipl-2023/slidelist/100414800.cms">Virat Kohli to Rinku Singh, here are the best batsmen of IPL 2023</a> <a href="https://www.businessinsider.in/tech/mobile/news/redmi-a2-plus-vs-realme-narzo-n53-mobile-comparison-phone-comes-under-10000/slidelist/100418931.cms">Redmi A2 Plus vs Realme Narzo N53 – Which of these sub-₹10,000 phones should you buy?</a> <a href="https://www.businessinsider.in/finance/news/2000-note-withdrawal-how-to-exchange-notes-is-it-a-legal-tender-and-other-questions-answered/articleshow/100412941.cms">₹2,000 note withdrawal – How to exchange them, is it a legal tender and other questions answered</a>

Seriously thinking about joining the Indian UPI payments system says Japanese official

New Delhi, Dec 8 () The Unified Payments Interface (UPI) system may not see many new players entering the space as it has got aggregated with few players, according to a report.
 As a payment product, UPI will continue to scale with more innovative use cases coming in and will remain default payment gateway for the country, said a report by The Digital Fifth.
 While UPI has enabled innovation in the payment space, it has resulted in larger players taking complete control of the market, it said.
 With wallet business depleting and UPI getting aggregated with few players, there may not be many new players entering this space.
 The report also came out with a list of top-30 fintech influencers, which includes Niti Aayog Advisor Anna Roy, Ujjivan Small Finance Bank CEO Nitin Chugh and CreditMantri co-founder Gowri Mukherjee.
 Advisor on industry and data management and analysis at the Niti Aayog, Roy also leads the Women in Entrepreneurship Platform (WEP) initiative, supporting women entrepreneurs in India. She is leading the Government of India's initiatives on frontier technologies such as BigData, artificial intelligence and Blockchain.
 The report further said the remittance business would continue to scale as the market has remained largely untapped as of now.
 India will see emergence of few large remittance players with focus on high-traffic corridors, it said.
 The business-to-business segment has done well over past few years across POS (point-of-sale) and payment gateway segments with firms such as Pinelabs and Razorpay, building scalable and profitable business models, it said.
 "This segment has primarily depended on merchant discount rate for their revenues. In the Budget, the government has proposed that the establishments with an annual turnover of more than Rs 50 crore will offer low-cost digital modes of payment to customers and no charges or MDR shall be imposed on customers or merchants," it said.
 This change will impact payment start-ups focusing on the issuance side where they share issuance fees with banks and acquirer side, it said. DP HRS

Not many new players will enter UPI space: Report

<ul><li>WhatsApp finally received the approval to operate <keyword id="3679109" type="PERSON" weightage="20" keywordseo="UPI-payments">UPI payments</keyword> from the National Payments Council of India.</li><li>WhatsApp’s payments feature has been rolled out in ten Indian regional language versions of WhatsApp. </li><li><keyword id="4878801" type="PERSON" weightage="20" keywordseo="whatsapp-pay">WhatsApp Pay</keyword>’s entry in payments also comes with a major blow to two of its biggest competitors – <keyword id="2750705" type="PERSON" weightage="20" keywordseo="Google-Pay">Google Pay</keyword> and <keyword id="6357886" type="UNKNOWN" weightage="20" keywordseo="phonepe">PhonePe</keyword> as NPCI has doled out a 30% cap for third party payment operators.</li><li>Amidst all of this, a beneficiary from WhatsApp Pay’s entry would be Mukesh Ambani’s JioMart.</li></ul>After a long wait, WhatsApp finally received the approval to operate the Unified Payments Interface (UPI) payments from the National Payments Council of India (NPCI). With this, WhatsApp Pay is set to roll out initially with a cap of 20 million users, to make payments ‘as easy as sending a message’. A day after securing the approval, WhatsApp is launching the payments feature in ten Indian regional languages. WhatsApp’s UPI entry begins with a partnership with five banks – ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank. “With UPI, India has created something truly special and is opening up a world of opportunities for micro and small businesses that are the backbone of the Indian economy. India is the first country to do anything like this. I’m glad we were able to support this effort and work together to help achieve a more digital India,” said Facebook CEO Mark Zuckerberg in a statement. But WhatsApp Pay’s entry in payments that was touted to be a <a href="https://www.businessinsider.in/business/news/google-pay-has-a-solid-lead-over-phonepe-paytm-and-amazon-pay-in-india-but-its-biggest-challenge-is-yet-to-come/articleshow/76542701.cms">death card</a> for many others has been accompanied by a major blow to two of its biggest competitors – Google Pay and Walmart-owned PhonePe. NPCI setback for Google Pay, Phone Pe According to the NPCI’s official statement, <keyword id="4052276" type="PERSON" weightage="20" keywordseo="UPI-transactions">UPI transactions</keyword> on third party payment apps cannot exceed 30% of the overall volume of transactions processed in UPI during the preceding three months. Both Google Pay and PhonePe which are third-party apps will be hit as they currently together hold 40% market share in the UPI segment which has recently crossed the 2 billion transaction count. <div type="image" title="UPI transactions final." msid="79076877" hostid="261"></div> " Digital payments in India is still in its infancy and any interventions at this point should be made with a view to accelerate consumer choice and innovation. A choice based and open model is key to drive this momentum. This announcement has come as a surprise and has implications for hundreds of millions of users who use UPI for their daily payments and could impact the further adoption of UPI and the end goal of financial inclusion," said Sajith Sivanandan, Business Head, Google Pay and Next Billion User initiatives, India on the NPCI cap issue. UPI transactions on PhonePe and Google Pay in October 2020 <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">PhonePe </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">835 million </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Google Pay </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">820 million </td></tr></tbody></table>Source: <a href="https://economictimes.indiatimes.com/tech/technology/whatsapp-pay-gets-green-light-to-go-live-on-upi/articleshow/79066734.cms">media reports</a> While the cap will be effective from January 1, 2021, existing third party operators like Google Pay and PhonePe have been given until 2022 to comply with the new rules. UPI’s growth in India and its interoperability has left behind other players who focussed on mobile payments alone. “PPI’s (pre-paid instruments like mobile wallets) which were once expected to scale up rapidly in the retail digital payments industry have clearly not achieved the success that they were expected to achieve. While there could be several explanations for this, one of the main reasons we believe is due to strong competition from UPI,” said a report by JM Financial from September 2020. However, players like Paytm which isn’t a big shareholder in UPI, won’t be affected by the new capping as it is a PSP (Payment service provider). WhatsApp Pay’s potential India is the first country where Facebook had begun its tryst with payments back in 2018 when WhatsApp began beta testing payments in the country. Since then, the company had met with several regulatory hurdles relating to data localisation, which was followed by a promise of storing data locally and WhatsApp Pay submitting revised data localization compliance this year. However, even while it hadn’t officially rolled out, experts have been betting on its popularity because of its existing 400 million user base in India. Analysts at Bernstein (from a June 2020 report) expected WhatsApp Pay’s penetration to increase to 30% (from the current 10%) by FY25. Abhijit Bose, WhatsApp India head, had also shared plans for the company’s foray into financial services in India in July 2020. WhatsApp will soon be driving its financial inclusion push in India with its foray into lending, micro-insurance, and micro-pension products. WhatsApp is currently running pilot programs for the same. “Based on the results, we will co-invest and scale. Even a small conversion of the demand will translate into an infusion of significant savings into the financial system,” <a href="https://techcrunch.com/2020/07/22/whatsapp-to-pilot-projects-to-deliver-credit-insurance-and-pension-to-users-in-india/">said Bose</a> then. JioMart – the silent winner Amidst all of this, a beneficiary from WhatsApp Pay’s entry would be India’s richest man’s e-commerce bet – Mukesh Ambani’s JioMart. “Payments remains the missing link, the tie up could be a potential game changer with WhatsApp Pay integration with JioMart,” said the report by Bernstein. WhatsApp Pay’s UPI approval and potential tie-up with JioMart after Facebook pumped $5.7 billion in Reliance earlier this year, will see JioMart gain by offering easy ordering and payment facility to its users through WhatsApp. “RIL’s foray into the space leveraging its large ofﬂine distribution capabilities, and integration of ability to order groceries through WhatsApp, a platform with &gt;400 mn MAUs in India,” said a Goldman Sachs report. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/whatsapp-pay-upi-services-gets-the-green-signal-from-npci-but-rollout-will-be-in-a-graded-manner/articleshow/79068908.cms">WhatsApp Pay UPI services gets the green signal from NPCI, but rollout will be in a 'graded' manner</a>

WhatsApp Pay UPI is now live while Google Pay, PhonePe have already got the first sting

Issues related to data privacy and rising <keyword id="20127272" type="General" weightage="20" keywordseo="online-frauds" source="keywords">online frauds</keyword> are emerging as significant hurdles in the growth of e-commerce in India, said the <keyword id="20613906" type="General" weightage="20" keywordseo="Economic-Survey" source="keywords" meta.keywordsubtype="org" meta.entityname="Economic Survey" meta.hostid="261" meta.entityid="Economic Survey">Economic Survey</keyword> 2023-24 tabled in Parliament on Monday. Citing third-party data, the survey said that the e-commerce industry in India is expected to cross USD 350 billion by 2030 and called for the need to educate users on the safe use of e-commerce platforms. "The rise of e-commerce is constrained by inadequate skills required for online selling, such as cataloguing. <keyword id="22505774" type="General" weightage="20" keywordseo="data-privacy-issues" source="keywords">Data privacy issues</keyword> and increasing online fraud have turned out to be the most significant hurdle in the growth of e-commerce in India. It becomes imperative to educate users on the safe use of e-commerce platforms," the survey said. The survey mentioned that India's e-commerce market has gained significant momentum during the past few years, owing to technological advancements, evolving new-age business models coupled with government initiatives like the Digital India program, UPI, One District - One Product (ODOP), Open Network for Digital Commerce (ONDC), new foreign trade policy, easing of FDI limits and Consumer Protection (E-Commerce) (Amendment) Rules 2021. It has identified data privacy and <keyword id="19906883" type="General" weightage="20" keywordseo="cybersecurity" source="keywords">cybersecurity</keyword> as critical concerns in the <keyword id="22505776" type="General" weightage="20" keywordseo="digitisation-of-services" source="keywords">digitisation of services</keyword> in the country and called for adopting strong security measures, compliance with privacy regulations, and innovation, among others. "Data privacy and cybersecurity have become critical concerns with the increasing digitisation of services," according to the survey. It said that the government is spearheading data protection laws and cybersecurity policies to safeguard consumer data and strengthen cybersecurity measures in the services sector. "To further embrace technology with confidence, ensuring the adoption of strong security measures, compliance with privacy regulations, and fostering innovation in security technologies are essential," the survey noted. It said the future of e-commerce is built on the enhanced <keyword id="20290101" type="General" weightage="20" keywordseo="user-experience" source="keywords">user experience</keyword> through <keyword id="19899640" type="General" weightage="20" keywordseo="AI" source="keywords">AI</keyword>, seamless <keyword id="21332958" type="General" weightage="20" keywordseo="digital-payment-methods" source="keywords">digital payment methods</keyword>, innovations like UPI, and business engineering data analytics for business operations and enhancements. The survey mentioned that the buyer ecosystem in India is evolving at a very sharp rate, and business models will need to innovate to serve the needs of a diverse shopper base regarding service expectations, price sensitivity and language requirements. "Local language platforms are needed as the shopper base expands to tier-2 and tier-3 cities. Growing startups and innovative social media platforms provide an opportunity to test unique business models that might be targeted to specific demographic cohorts," the survey said.

Data privacy issues, online frauds emerging as e-commerce growth hurdles: Eco Survey

<ul><li>The <keyword id="8529662" type="UNKNOWN" weightage="20" keywordseo="vajra-platform">Vajra Platform</keyword> uses distributed ledger technology to ensure security and improve the speed of transactions.</li><li>Payment companies and end users alike are expected to benefit from this new platform.</li><li>UIDAI will also use the Vajra Platform for Aadhaar authentication.</li></ul>The National Payments Corporation of India (NPCI) has launched the Vajra Platform to make payments fast and secure. Based on blockchain technology, the primary highlight of the Vajra Platform is that it automates clearing and settlement of payments, drastically reducing the need for manual reconciliation. While making the <a href="https://www.npci.org.in/sites/default/files/Vajra%20Paltform%2019%20Nov.pdf">announcement</a>, NPCI said that the Vajra Platform uses distributed ledger technology (DLT). It uses a permissions model to ensure that only approved parties are a part of the network. Payment companies can apply to be a part of the network. Once approved, they can deploy the platform using an application programming interface (API) that will be provided by NPCI. Benefits of the Vajra Platform 
 <div type="image" title="NPCI Vajra" msid="73123521" hostid="261"></div>



 According to NPCI, following are the benefits of the Vajra Platform: <ul><li>Near real-time clearing and settlement of transactions.</li><li>Minimal reconciliation of transactions.</li><li>Improved security and reduced operational and financial risks.</li><li>Legitimate audit trail as DLT is incorruptible.</li></ul>Improved security and reduction in manual reconciliation should reduce cost of operations for payment companies. As far as end users are concerned, the introduction of Vajra Platform should make the process of payments even more seamless than it is right now. The use of DLT and the resulting audit trail should also make it easier to track and resolve payment disputes. At the moment, payment disputes raised by users take at least three working days to be resolved. In addition to improving the security of payments and making the process faster, the Vajra Platform will also be used for Aadhaar authentication by the Unique Identification Authority of India (UIDAI). Although the Indian government and has been <a href="https://www.businessinsider.in/what-is-cryptocurrency-in-india/articleshow/70132522.cms">against</a> the concept of cryptocurrency, it has now embraced one of its features. The Reserve Bank of India has also <a href="https://rbidocs.rbi.org.in/rdocs/content/Mp3/RBI0320191205102610.mp3">revealed</a> that it is thinking about developing a sovereign digital currency, although it banned cryptocurrency. See also: <a href="https://www.businessinsider.in/tech/how-to/what-is-upi-and-how-does-it-work/articleshow/73030004.cms">What is UPI and how does it work?</a> <a href="https://www.businessinsider.in/no-mdr-charges-applicable-on-payment-via-rupay-upi-from-jan-1-fm/articleshow/73008482.cms">No MDR charges applicable on payment via RuPay, UPI from Jan 1: FM</a> <a href="https://www.businessinsider.in/google-wants-us-to-learn-from-indias-upi-example-writes-letter-to-federal-reserve-to-build-fednow/articleshow/72669392.cms">Google wants US to learn from India's UPI example, writes letter to Federal Reserve to build FedNow</a>

NPCI Vajra Platform blockchain-based platform launched for secure and fast payments

Mumbai, Dec 30 () No MDR charges on transactions through RuPay cards and UPI payments will kill the digital payments industry, the Payments Council of India stated on Monday while criticising the government's move.
 After a meeting with bankers last Saturday, Finance Minister Nirmala Sitharaman had asked them not to charge MDR on payments via RuPay, UPI from January 1 with a view to driving digital payments.
 The move will apply to all companies with a turnover of Rs 50 crore or more. Merchant Discount Rate is the fee paid by a merchant to a bank for accepting digital payments. The move is part of the budget announcement in July.
 Describing the decision as surprising and will stop investment and innovation, Vishwas Patel, the Payments Council of India Chairman, said, "the zero MDR on RuPay and UPI will kill the industry and make the business model unviable. It's like nationalisation of the payments industry. If the government wants to drive digitization, then it should bear the cost." 
 Stating that there will be significant negative impact on the payment ecosystem -- innovation, job losses and a slowdown in the expansion of the digital payments, he said the move will lead to end of customer incentive spends by participants.
 The PCI, the representative body of merchant acquirers and aggregators, also warned that elimination of MDR will dry out revenue, creating a catastrophic situation for the industry. Additionally, if there is zero revenue to be made from the over 500 million plus active RuPay debit cards, service providers will start withdrawing PoS terminals to cut their losses.
 "If government wants to push digital payments, then making MDR zero is not the solution, but a lower, controlled MDR along with added tax benefits to merchants will go a long way," Patel suggested. 
 Terming the decision with the right intention but a wrong policy, he said the decision is going to impact the whole digital payment industry as well as investments. 
 He also recalled expert panel recommendations by the RBI-appointed Nandan Nilekani panel and the Watal committee of Niti Ayog calling for market-driven pricing. 
 Digital payments had reached 13 per cent during the demonetisation months but has since declined to around 11 per cent now, indicating rising cash in circulation, he said. 
 "It is also irrational to pass on the benefits to large retail merchants for transactions above Rs 2,000," he said, adding the move will deflate the hard work done by the acquiring industry and that if MDR is not to be charged to merchants, it should be borne by the government. BEN MR
MR

No MDR on RuPay,UPI payments will kill industry, warns industry

<ul class="summary-list"><li>This story was delivered to Business Insider Intelligence Payments &amp; Commerce subscribers earlier this morning.</li><li>To get this story plus others to your inbox each day, hours before they're published on Business Insider, <a href="https://store.businessinsider.com/products/payments-commerce-pro-membership?IR=T&amp;itm_source=businessinsider&amp;itm_medium=content_marketing&amp;itm_campaign=briefing_post&amp;itm_content=top_text&amp;itm_term=bundle_subscription_text_link-new-merchant-fee-rules-google-pay-paytm-adjust-strategies-2020-2">click here</a>.</li></ul>The Indian government moved to block merchant discount rates (MDRs) - the rates charged to merchants on transactions - on digital transactions via RuPay cards and the country's Unified Payments Interface (UPI) as of January 1, 2020, per <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9pbmM0Mi5jb20vYnV6ei9uby1tZXJjaGFudC1jaGFyZ2VzLW9uLWRpZ2l0YWwtcGF5bWVudHMtdmlhLXVwaS1hbmQtcnVwYXktZ292dC8/56c34aced7aaa8f87d8b56a7B7e7f9abb" target="_blank" rel="noopener">Inc42</a>.For context, the UPI is a network that enables mobile bank-to-bank transactions. Removing these fees could make digital payments more attractive to merchants than other payment options that still carry additional fees, including those from foreign card networks, potentially boosting digital payment acceptance in India. But the lack of revenue from transactions could impact top digital payments companies in India, like Paytm and Google Pay.Paytm is adding new products for merchants that could help it find new revenue and address its losses.Paytm <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9ibG9nLnBheXRtLmNvbS9pbnRyb2R1Y2luZy1hbGwtaW4tb25lLWFuZHJvaWQtcG9zLWZvci1zbWFsbC1idXNpbmVzc2VzLWFuZC1tZXJjaGFudC1wYXJ0bmVycy1jM2RjYjQ4MDc2Mw/56c34aced7aaa8f87d8b56a7B684bdcae" target="_blank" rel="noopener">debuted</a> an "All-in-One" point-of-sale (POS) solution that could boost its appeal to merchants. The POS tool accepts payments via the UPI, Paytm wallet, as well as credit and debit cards, and has been tested by over 150,000 merchants, according to <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9pbmM0Mi5jb20vYnV6ei9wYXl0bS1sYXVuY2hlcy1hbGwtaW4tb25lLXFyLWNvZGUtcG9zLWRldmljZS1hbmQtbWVyY2hhbnQtc2RrLw/56c34aced7aaa8f87d8b56a7Bffb11077" target="_blank" rel="noopener">Inc42</a>.The solution can also generate QR codes, print invoices, track cash payments, handle deferred payments, and help with customer management, among other capabilities. The offering's potential to handle all of a merchant's payment needs could deepen Paytm's connection with its existing merchant base and attract new sellers, especially because the device appears to work in several contexts since Paytm noted that it piloted the device for bus ticketing services, parking management, home delivery, and in other spaces.This is part of Paytm's effort to court merchants and derive revenue from them, and it's particularly necessary as the company tries to boost revenue without an MDR and limit its losses. Paytm is aiming to cut its losses by over half in the next two years - it <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly90ZWNoY3J1bmNoLmNvbS8yMDE5LzA5LzA5L3BheXRtLW9uZTk3LWxvc3Nlcy1meS0yMDE5Lw/56c34aced7aaa8f87d8b56a7B5afbba01" target="_blank" rel="noopener">posted</a> net losses of approximately $549 million in its fiscal year ended March 31, 2019 - and part of its initiative to do so includes building out its merchant network and winning revenue from them, per <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9lY29ub21pY3RpbWVzLmluZGlhdGltZXMuY29tL3NtYWxsLWJpei9zdGFydHVwcy9uZXdzYnV6ei9wYXl0bS10by1tb25ldGlzZS1vZmZsaW5lLW1lcmNoYW50LWJhc2UtcGxhbnMtdG8tY3V0LWxvc3Nlcy1ieS1oYWxmLXZpamF5LXNoZWtoYXItc2hhcm1hL2FydGljbGVzaG93LzczOTQ5MjE0LmNtcw/56c34aced7aaa8f87d8b56a7Bbe2fe80f" target="_blank" rel="noopener">The Economic Times</a>. Providing solutions like its new POS offering and <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9pbnRlbGxpZ2VuY2UuYnVzaW5lc3NpbnNpZGVyLmNvbS9wb3N0L2FtYXpvbi10YXJnZXRzLWx1eHVyeS1mYXNoaW9uLWFtZXgtY2xlYXJlZC1mb3ItY2hpbmVzZS1vcGVyYXRpb25zLWNoYXNlLXVwcy1zYXBwaGlyZS1mZWUtYW5kLXBlcmtzLTIwMjAtMQ/56c34aced7aaa8f87d8b56a7B07ed8639" target="_blank" rel="noopener">payment management</a> tools may build out its network and give it new revenue streams, helping it improve its bottom line.Meanwhile, Google is looking to use its learnings in India to revamp its payment offerings globally, possibly to seek new revenue opportunities now that it can't implement an MDR in India. Alphabet CEO Sundar Pichai noted on the company's <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9zZWVraW5nYWxwaGEuY29tL2FydGljbGUvNDMyMTA5NC1hbHBoYWJldC1pbmMtZ29vZy1jZW8tc3VuZGFyLXBpY2hhaS1vbi1xNC0yMDE5LXJlc3VsdHMtZWFybmluZ3MtY2FsbC10cmFuc2NyaXB0P3BhcnQ9c2luZ2xl/56c34aced7aaa8f87d8b56a7Be3560b6e" target="_blank" rel="noopener">earnings call</a> that its launch in India was successful and that its learnings from that will help inform global payment product improvements in 2020.Google Pay is a <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9yYXpvcnBheS5jb20vYmxvZy91cGktcHJlZmVycmVkLXBheW1lbnQtbW9kZS1zZXB0ZW1iZXItMjAxOS1kYXRhLw/56c34aced7aaa8f87d8b56a7Bc58225e8" target="_blank" rel="noopener">top</a> UPI transaction driver, but without an MDR it may struggle to bring in revenue in the market. This may be why the company is looking to revamp its payment capabilities beyond India, and might help explain why Google <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9pbnRlbGxpZ2VuY2UuYnVzaW5lc3NpbnNpZGVyLmNvbS9wb3N0L3BheXBhbHMtcGFydG5lcnNoaXAtd2l0aC1jaXRpLWhpZ2hsaWdodHMtaXRzLXdhbGxldC1nb29nbGUtb2ZmZXJzLWZlZG5vdy1hZHZpY2UtYWxpYmFiYS1hbmQtaWNiYy10ZWFtLXVwLW9uLWZpbnRlY2gtMjAxOS0xMj9jaWQ9c2VhcmNoI0lURU0lMjAy/56c34aced7aaa8f87d8b56a7B1e569c4c" target="_blank" rel="noopener">suggested</a> the US Federal Reserve model its <a href="https://e.businessinsider.com/click/19374342.9890/aHR0cHM6Ly9pbnRlbGxpZ2VuY2UuYnVzaW5lc3NpbnNpZGVyLmNvbS9wb3N0L3RoZS1mZWQtdG8tbGF1bmNoLW5ldy1zZXJ2aWNlLXRvLWNvbXBldGUtaW4tcmVhbC10aW1lLXBheW1lbnRzLXNwYWNlLWZpcy1yZXZlYWxzLW5ldy1zdHJ1Y3R1cmUtYWZ0ZXItd29ybGRwYXktYWNxdWlzaXRpb24tdWstdG8tZGVsYXktZW5mb3JjZW1lbnQtb2YtbmV3LWF1dGhlbnRpY2F0aW9uLXJlcXVpcmVtZW50cy0yMDE5LTg/56c34aced7aaa8f87d8b56a7B97f1b1f3" target="_blank" rel="noopener">forthcoming</a> real-time payments (RTP) network off of the UPI.Want to read more stories like this one? 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New merchant fee rules could force Google Pay and Paytm to adjust strategies

New Delhi, Apr 24 () Online <keyword id="6359540" type="PERSON" weightage="20" keywordseo="payments">payments</keyword> dropped by 30 per cent during the nationwide lockdown, hit by fall in digital <keyword id="96567" type="COUNTRY" weightage="20" keywordseo="Transactions">transactions</keyword> across sectors like logistics, travel, real estate and food and beverages, as per a report by fintech platform Razorpay.The report is based on transactions on Razorpay's platform between February 24 to March 23 (before lockdown) and March 24 to April 23 (during lockdown). It found that digital transactions recorded highest fall of 41 per cent in Gujarat followed by Madhya Pradesh (39 per cent) and Tamil Nadu (26 per cent). Interestingly, segments like utilities (bill payments), IT and software, and media and entertainment saw a growth of 73 per cent, 32 per cent and 25 per cent, respectively as people stayed indoors. "Transactions in logistics dropped by 96 per cent due to gaps in supply chain. Travel sector declined by 87 per cent, real estate by 83 per cent, F&amp;B by 68 per cent, and Grocery by 54 per cent," the report said. Digital transactions in cities like Ahmedabad, Mumbai and Chennai took a hit of 43 per cent, 32 per cent and 25 per cent, in these 30 days (March 24 to April 23), it added. "A significant drop of 30 per cent in online payments in the last 30 days is something we are seeing for the first time after demonetisation," Razorpay CEO and co-founder <keyword id="3349619" type="PERSON" weightage="20" keywordseo="Harshil-Mathur">Harshil Mathur</keyword> said. He added that in the first two weeks of March before lockdown, the overall online spending increased by about 10 per cent but later saw a dip primarily owing to precautionary measures which people started to take by staying indoors. Mathur said while COVID-19 continues to create uncertainty on a number of fronts, the pandemic is also a turning point for the fintech industry. There has been a growth in adoption of digital payments, especially in tier II and III cities in the last 30 days of lockdown. "I believe this is a huge opportunity for fintech companies, some of them may have to re-examine their business models after COVID-19, prioritising growth and customer acquisition over profitability. The fintech industry will be forced to evolve, think big and act boldly which will eventually result in innovations in payments and banking solutions to be able to meet new customer demands and behaviours," he said. During lockdown, online donations (transactions) towards NGOs increased by 180 per cent, the report said. In payment modes (during lockdown), UPI made the highest contribution of 43 per cent, followed by debit and credit cards with 39 per cent and netbanking with 10 per cent. However, compared to the 30 days before lockdown, transactions via UPI, cards and netbanking declined by 37 per cent, 30 per cent and 28 per cent, respectively, the report added. Among UPI apps, Google Pay contributed the highest with a 46 per cent share followed by PhonePe with 29 per cent and <keyword id="6357120" type="PERSON" weightage="20" keywordseo="paytm">Paytm</keyword> with 10 per cent. During the lockdown, Paytm saw a drop by 47 per cent, Google Pay 43 per cent and PhonePe 32 per cent. However, Paytm dismissed the same. "We would like to ascertain that Paytm Payments Gateway is India's leading payment processing platform with over 50% market share. For our merchant partners, we are directly processing transactions that can not be captured by any other payment gateway provider with regards to Paytm's UPI growth, contribution, and market share. Therefore, transactions done on Razorpay cannot be put forward as the industry's trend to determine Paytm's contribution to UPI. Their representation on Paytm's growth is misleading," said a Paytm spokesperson. Mobile wallet transactions, particularly in tier II cities saw a spike in the last 30 days, owing to increased contribution to PM Cares Fund and cashback offers and transactions via JioMoney increased by 66 per cent, AmazonPay by 63 per cent and Paytm by 43 per cent, the report said. SR ANUANU

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