Bengaluru-based digital payments company PhonePe has been directed by the National Payments Corporation of India (NPCI) to look for another banking partner for its Unified Payments Service (UPI) model.
As per an ET report, two people aware of the development, said that PhonePe will now be collaborating with ICICI Bank for a partnership for its UPI handle. NPCI had reportedly discussed with its internal committees about making it mandatory for any third party payment provider with more than 5 percent market share to have more than one banking partner. As the firm is a leading name in the UPI payments space with one partner bank, PhonePe now is genuinely looking for another partner.
PhonePe is already in partnership with Yes Bank and offering ‘@ybl’ UPI handle, but, in future, the new customers could now be allocated ICICI Bank handles.
The report said that despite being in process, it is difficult to convey how long will it take for the partnership to go live as it is depending on technical integrations and certifications.
“The mandate from NPCI for major UPI players to go multi-bank was to avoid cases of transaction declines, it also allows banks with large customer base to keep their customers within their settlement ecosystem,” the report added.
Private lender ICICI bank had stopped UPI transactions commenced by its customers through PhonePe in January 2017. At that time, security reasons and issues pertaining to adherence of interoperability guidelines were then cited as a reason to stop it