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ICICI Bank has blocked transactions on Flipkart-owned digital payments app PhonePe, accusing it of indulging in restrictive practices and breaking the Unified Payment Interface (UPI) guidelines of interoperability.
The bank began blocking transactions on PhonePe starting Friday, with CEO Sameer Nigam taking to Twitter to protest the move yesterday. He claimed that the bank hadn’t provided the company with any prior warning or information, saying the move was “on purpose”.
“This entity (PhonePe) is following restrictive practices allowing users to make payments with only its UPI handle, which is in contravention to the UPI guidelines of interoperability and choice that empowers a customer to choose any app to make payments through UPI,” said the bank in a statement.
Flipkart declined to comment on the developments.
This is the second such instance of mainstream banks blocking services to new-age digital payments companies. Previously, State Bank of India, the country’s largest bank stopped allowing users to top up their Paytm wallets using Internet Banking features. The bank claimed it did so because of security concerns.
“And what about blockage for other universal interface called net banking?” Paytm founder Vijay Shekhar Sharma responded to Nigam’s plea on Twitter.
These moves are being seen as traditional banks getting nervous of being disrupted by new-age digital payments players. Post the government’s demonetisation scheme, players such as Paytm, Freecharge and PhonePe have been racking up millions of transactions and roping in hoards of new users due to the convenience they offer.
Airtel and Paytm have finally started their payment bank services too, which offers customers the same convenience of using a wallet with some benefits of traditional banks too. Airtel, for instance, will offer users 7.5 per cent interest per annum on money they park in their payment bank/wallet accounts.
While the government is backing BHIM, a UPI app built by the National Payments Corporation of India, people expect the move to only fuel the adoption of other digital payment apps as users begin to look for more options to transact.
“We’re a full feature app in the sense that you can do recharges, bill payments or pay directly to a mobile number, whereas they (BHIM) are base vanilla,” Nigam said in a recent telephonic interview with Business Standard .
Today both BHIM and PhonePe each have 10 million downloads for their apps. The government’s digital push has ensured that UPI has been adopted far faster than previous digital payment standards such as IMPS, which took over three years to become mainstream.
ICICI blocks transactions on Flipkart-owned PhonePe | Business Standard News
The bank began blocking transactions on PhonePe starting Friday, with CEO Sameer Nigam taking to Twitter to protest the move yesterday. He claimed that the bank hadn’t provided the company with any prior warning or information, saying the move was “on purpose”.
“This entity (PhonePe) is following restrictive practices allowing users to make payments with only its UPI handle, which is in contravention to the UPI guidelines of interoperability and choice that empowers a customer to choose any app to make payments through UPI,” said the bank in a statement.
Flipkart declined to comment on the developments.
This is the second such instance of mainstream banks blocking services to new-age digital payments companies. Previously, State Bank of India, the country’s largest bank stopped allowing users to top up their Paytm wallets using Internet Banking features. The bank claimed it did so because of security concerns.
“And what about blockage for other universal interface called net banking?” Paytm founder Vijay Shekhar Sharma responded to Nigam’s plea on Twitter.
These moves are being seen as traditional banks getting nervous of being disrupted by new-age digital payments players. Post the government’s demonetisation scheme, players such as Paytm, Freecharge and PhonePe have been racking up millions of transactions and roping in hoards of new users due to the convenience they offer.
Airtel and Paytm have finally started their payment bank services too, which offers customers the same convenience of using a wallet with some benefits of traditional banks too. Airtel, for instance, will offer users 7.5 per cent interest per annum on money they park in their payment bank/wallet accounts.
While the government is backing BHIM, a UPI app built by the National Payments Corporation of India, people expect the move to only fuel the adoption of other digital payment apps as users begin to look for more options to transact.
“We’re a full feature app in the sense that you can do recharges, bill payments or pay directly to a mobile number, whereas they (BHIM) are base vanilla,” Nigam said in a recent telephonic interview with Business Standard .
Today both BHIM and PhonePe each have 10 million downloads for their apps. The government’s digital push has ensured that UPI has been adopted far faster than previous digital payment standards such as IMPS, which took over three years to become mainstream.
ICICI blocks transactions on Flipkart-owned PhonePe | Business Standard News
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