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    UPI spreads the net to rope in 10-15 e-tailers; eBay, MakeMyTrip, Pepperfry likely to join

    Synopsis

    So far, person-to-person transactions are taking place on the UPI platform, which was launched by NPCI and the Reserve Bank of India on August 25.

    ET Bureau
    NEW DELHI: The government-backed Unified Payments Interface (UPI), a system that allows money to be transferred between bank accounts through smartphones, could rope in as many as 10-15 ecommerce merchants in a big upgrade to enable people to seamlessly pay for online shopping.

    "In the next one or two months, a sizeable number of ecommerce merchants will go live on UPI. That’s what our effort is. At least 10-15 merchants will be going live so that we can get good traffic," Dilip Asbe, Chief Operating Officer of the National Payments Corporation of India (NPCI), told ET. He did not identify the ecommerce companies, saying banks are in talks with them.

    So far, person-to-person transactions are taking place on the UPI platform, which was launched by NPCI and the Reserve Bank of India on August 25, with the participation of 21 banks.

    "Many providers will also come now, which will layer user services like bill payments and mobile top-ups, which will ride on UPI platform," Asbe said, dwelling on the upcoming plans. The Centre is rooting for the project, top government officials told ET, calling UPI a testament to PM Narendra Modi’s pet projects of a Digital India and a cashless economy.

    Online merchants including eBay, MakeMyTrip and Pepperfry are said to be joining the UPI network soon, along with Bharat Sanchar Nigam Ltd, Mahanagar Telephone Nigam Ltd. and Idea Cellular for mobile bill payments. The Indian Railway Catering & Tourism Corporation, which operates the widely used train ticket booking website, may also join the UPI platform to offer customers an instant payment option.

    Flipkart-owned PhonePe has already launched its app based on the UPI platform, ET reported on August 29. In a recent presentation to state governments, NPCI listed 26 "broad use cases" of the UPI platform – from paying one’s local vegetable vendor to payment of EMIs, toll plaza charges, making donations, school fees, movie tickets, utility bills such as electricity, water and credit cards and even for cash-on-delivery option by online shoppers.

    The UPI platform may compete with wallet services such as Paytm, which also use the RBI’s Immediate Payment Service for money transfers. While digital wallets can be used without a bank account and offer users attractive cash-back offers and discounts on transactions, UPI requires senders and receivers of money to have bank accounts. Asbe, however, disagreed that UPI would compete with wallets. "The market is too big… I don’t see a reason why both (UPI and wallets) cannot survive. The ecosystem is large enough. As a country, we need multiple payment options. Finally, the consumer is king and will use the option most convenient," Asbe told ET. An email sent to Paytm for comment was not answered.

    The COO said UPI had been working with a couple of wallet providers so that the platform can be used for wallet top-ups. "Wallets should get benefit from UPI," Asbe said. He added customers would use both UPI and wallets. "One segment wants to do fund transfer from bank account to bank account – that segment will rely on UPI. There will be people who want to use wallets for cash-back and attractive offers from merchants – they will use wallets," Asbe said. One benefit that UPI offers customers is the ability to have multiple virtual addresses for accounts in various banks.

    ET View: Revolutionary
    The PMO’s push makes sense. The goal of UPI is to foster financial inclusion and use technology to improve the quality of life. UPI allows people to transfer money from their accounts instantly to another bank account linked to a smartphone. The advantages include its open architecture and flexible user interface. Data connectivity has to be good. To enable rural massess to use UPI, India should lower the price of spectrum. Of course, online wallets can co-exist.


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