UPI is forcing Paytm, MobiKwik to diversify business

Many mobile wallets companies did not agree with PayU's global CEO Laurent le Moal, who said that UPI will severely hit their businesses to the extent that they will even become redundant.

However, they did say that the Unified Payments Interface (UPI)-which allows transactions to take place through one window-will affect their business in some or the way.

In this backdrop, the mobile wallets firms are coming up with a string of measures to combat the UPI threat.

Paytm, MobiKwik and Oxigen say the UPI will affect the new mobile wallets companies and they will have to diversify their business to remain in the competition.

"I completely disagree with the view that wallets are passé," Upasana Taku, co-founder of MobiKwik, told ET.

As per reports, the mobile wallet market is estimated to grow at about 30 per cent from 2015 to 2019.

Meanwhile, AP Hota, managing director of the National Payments Corporation of India, which also set up the UPI, told ET said wallets aren't under threat.

“The purpose of UPI is to bring the convenience offered by wallet companies to those who only have bank accounts. Large amounts of transactions are still being carried out in cash. If we can aim at tapping those transactions (for conversion to cashless) be it through wallets or bank account, it will still be insufficient," he told ET.

Vijay Shekhar Sharma, Paytm owner, said his company was transforming to a payments bank now.

"I don't think there's space for many more players to come in. The company was moving towards being a differentiated bank that will attempt to solve the larger problem of payments. Paytm has a payments bank licence and expects to launch later this year,” he told ET.

Also, Oxigen Services India Pvt said that UPI has demolished the case for a payment gateway for the wallet player.

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