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UPI Lite Boost: New Limits And Auto Top-Up Feature Launching Soon!

November 1, 2024, 12:20 am

New Delhi: UPI Lite users can look forward to significant enhancements as the platform implements two crucial updates starting November 1, 2024. These changes, driven by the Reserve Bank of India’s (RBI) latest decisions, aim to improve the payment experience for users across popular platforms like Google Pay, PhonePe, and Paytm.

Increased Transaction Limits

The first major update is an increase in the transaction limit for UPI Lite. Currently, users can make transactions of up to Rs.500 with a maximum wallet balance of Rs.2,000 and a daily spending limit of Rs.4,000. Under the new guidelines, RBI plans to raise the maximum transaction limit to Rs.1,000 and the wallet balance limit to Rs.5,000. This enhancement will enable users to make more substantial payments seamlessly.

Introducing Auto Top-Up Feature

The second update is the introduction of an auto top-up feature, which will also take effect on November 1. This new functionality automatically adds funds to a user’s UPI Lite balance if it falls below a predetermined threshold, eliminating the need for manual recharges. With this feature, UPI Lite users can enjoy uninterrupted payment capabilities without the hassle of constantly checking their balance.

Background on UPI Lite Updates

The auto top-up feature is part of the National Payments Corporation of India’s (NPCI) ongoing efforts to streamline the UPI Lite experience. Previously, UPI Lite required users to recharge their wallets manually from their bank accounts. The introduction of this feature aims to simplify the process and encourage more users to leverage UPI Lite for their small transaction needs.

Recent RBI data highlights a decline in debit card-based transactions, down 8% in September, as UPI payments continue to surge in popularity. With these upcoming changes, UPI Lite is poised to further enhance its appeal and utility for everyday transactions.

As UPI Lite evolves with these new features, users can anticipate a smoother and more efficient payment experience starting November 1, 2024.

PhonePe Reports Rs 197 Crore Profit In FY24, Revenue Surges 74%

August 26, 2024, 2:59 pm

The PhonePe Group reported an adjusted profit after tax of Rs 197 crore for the financial year 2023-24, marking a sharp recovery from a loss of Rs 738 crore in the previous fiscal year. The company’s revenue also saw impressive growth, jumping 74% to Rs 5,064 crore in FY24, compared to Rs 2,914 crore in FY23.

Strong Performance in Payments Business

PhonePe’s standalone payments business was a major contributor to this success, recording an adjusted profit after tax of Rs 710 crore in FY24, a dramatic improvement from the Rs 194 crore loss in the previous year. This achievement underscores PhonePe’s focus on operational efficiency and automation, which have been key drivers in enhancing profitability while maintaining robust growth.

Strategic Focus on Sustainable Growth

Adarsh Nahata, PhonePe’s Chief Financial Officer, emphasized the company’s financial strategy, highlighting three pillars: sustainable revenue growth, diversification of revenue streams, and continuous improvements in profitability. “These pillars have guided our strategic decisions, enabling us to scale rapidly while maintaining a focus on profitability and our healthy financial position,” Nahata said.

CEO’s Vision for Future Growth

Founder and CEO Sameer Nigam expressed confidence in PhonePe’s financial discipline and its role in achieving profitability in the competitive Indian payments market. “We believe a focus on disciplined financial management will help us continue in the progression towards profitability of our Payments business, which by itself is a unique feat in the Indian context,” said Nigam. He also stressed the importance of optimizing investments and capital allocation, along with building a diversified revenue model, as crucial to the company’s sustained success in the future.

PhonePe’s remarkable performance in FY24 reflects its strong market position and strategic approach, setting a solid foundation for continued growth and profitability in the years to come.

PhonePe Unveils ‘Credit Line on UPI’, Boosting Payment Flexibility

August 22, 2024, 1:35 pm

PhonePe has introduced a new feature called ‘Credit Line on UPI,’ designed to enhance the convenience of transactions for its users. This feature allows consumers to connect their credit lines from banks to the Unified Payments Interface (UPI) on the PhonePe platform, enabling seamless merchant payments and further expanding the digital payment ecosystem.

This innovation follows a recent move by the Reserve Bank of India (RBI) to expand UPI’s scope to include pre-approved credit lines. With ‘Credit Line on UPI,’ users can now utilize their credit lines at a wide range of merchants, making transactions smoother and more accessible.

The feature allows consumers to integrate their credit lines into UPI, which provides greater flexibility in managing monthly expenses with short-term credit options. It simplifies the transaction process and enhances the overall payment experience, allowing consumers to make purchases with ease across millions of merchants.

For businesses using PhonePe’s Payment Gateway (PG), this new option offers an additional payment method at checkout, reducing transaction friction and lowering cart abandonment rates. By incorporating ‘Credit Line on UPI,’ merchants can increase sales by expanding their payment acceptance capabilities.

Deep Agrawal, Head of Payments at PhonePe, expressed excitement about the launch, saying, “We are excited to launch Credit Line on UPI on our platform. This is the second offering that will unlock the potential of credit usage on UPI, following the tremendous success of Rupay Credit Cards on UPI.” He added that PhonePe is committed to providing innovative payment solutions and sees this feature as revolutionizing access to credit in India.

To use the feature, users can easily link their credit lines to UPI on the PhonePe app by navigating to the profile section, selecting their bank, and setting a UPI PIN. Once linked, the Credit Line will appear as a payment option during transactions.

Google, Amazon, And Walmart Seek To Join RBI’s Digital Currency Pilot

August 5, 2024, 3:26 pm

Google Pay, Amazon Pay, and Walmart-backed PhonePe are among the five payment firms seeking to join the Reserve Bank of India’s (RBI) digital currency pilot. This initiative aims to enhance transactions using the e-rupee, according to sources directly involved in the discussions.

Companies Joining the E-Rupee Pilot

Alongside Google Pay, Amazon Pay, and PhonePe, Indian fintech firms Cred and Mobikwik have also applied to participate in the pilot. The RBI launched the e-rupee, a digital alternative to physical currency, in December 2022. Despite an initial surge, e-rupee transactions have declined, reflecting the challenges central banks face in popularizing digital currencies globally.

Payment Firms and Their Role

Google Pay and Amazon Pay, offered by Alphabet Inc’s Google and Amazon.com respectively, facilitate retail payments via India’s Unified Payments Interface (UPI). Initially, the central bank allowed only banks to offer e-rupee transactions via their mobile applications. However, in April, the RBI announced that payment firms could also provide e-rupee transactions once approved.

Payment firms are collaborating closely with the RBI and the National Payments Corporation of India (NPCI), the domestic payments authority, and are expected to roll out access to the e-rupee within the next three to four months, the sources said.

Current Status and Future Plans

While digital currency transactions exceeded 1 million daily late last year, they have since declined to about 100,000-200,000 a day, according to one source. Allowing popular payment firms to offer e-rupee should help increase transaction volumes by expanding the user base, noted another source.

These five payment firms account for over 85% of digital payments via UPI, which averages around 13 billion transactions each month. Despite efforts to popularize the e-rupee, the central bank does not plan a full-scale launch of the digital currency anytime soon.

“The e-rupee is likely to stay in the pilot stage for the next couple of years,” the source added.

No Official Comments Yet

The sources declined to be identified because they are not authorized to speak to the media. The RBI and NPCI did not respond to emails seeking comment, and the five companies involved also declined to comment.

RBI Deadline Over, Credit Card Payments Via Cred, PhonePe Still Possible

July 1, 2024, 6:12 pm

Despite the RBI’s June 30 deadline for the Bharat Bill Payment System (BBPS), certain users retain the ability to pay their credit card bills via third-party platforms such as Cred and PhonePe. These fintech providers are enabling credit card bill settlements for banks that have not yet complied with BBPS regulations using alternative channels like IMPS, NEFT, and UPI. However, industry sources indicate that Paytm is not facilitating such transactions.

The Reserve Bank of India mandated that all credit card payments must transition to the centralised Bharat Bill Payment System (BBPS) by June 30. Industry sources report that fintech platforms like Cred and PhonePe are employing alternative methods such as IMPS, NEFT, and UPI to process payments for non-compliant banks like HDFC Bank and Axis Bank, according to News 18.

Meanwhile, for banks compliant with BBPS like SBI and Kotak Mahindra Bank, these platforms are using the centralized billing network to route payments.

According to News 18, HDFC Bank and Axis Bank, among other major banks, have not activated BBPS.

Today, ICICI Bank activated BBPS, increasing the total number of banks that have implemented BBPS to 12.

“Lenders are all getting on board pretty fast,” said an industry player.

Banks that have activated BBPS include SBI Card, BoB Card, IndusInd Bank, Federal Bank, and Kotak Mahindra Bank.

“The reports that customers would not be able to make payments through fintech platforms like Cred after June 30 are completely untrue. Users can still make credit card bill payments for any bank. It is business as usual. For those lenders who have not complied with the BBPS directive, third-party apps are using alternative methods like IMPS, NEFT, and UPI. However, the fintech companies are using BBPS for those lenders who have already activated it,” an industry player explained.

Cred and PhonePe are enabling credit card payments for banks that have not complied with regulations, but Paytm does not support this. “From July 1, 2024, we support credit card bill payments only for banks registered on the Bharat Bill Payment System (BBPS). We will update you once this bank is supported,” read a pop-up on Paytm while attempting to pay an HDFC Bank credit card bill on July 1.

Credit Card Bill Payments Via Third-Party Apps: User Experience

Today, a user made a payment for their HDFC credit card bill using Cred. As HDFC Bank has not yet implemented BBPS, the payment was processed through IMPS, News 18 said. The SMS received by the HDFC Bank credit card user after the bill payment read: “DEAR HDFCBANK CARDMEMBER, PAYMENT OF Rs. XXX RECEIVED TOWARDS YOUR CREDIT CARD ENDING XXXX THROUGH IMPS ON 1-7-2024. YOUR AVAILABLE LIMIT IS RS. XXXXXX.”

Another payment made by an SBI credit card user via Cred read: “We have received payment of Rs.7,328.00 via BBPS & the same has been credited to your SBI Credit Card.”

Why Has RBI Mandated Centralised Payment of Credit Cards?

According to industry sources, the RBI’s objective with the centralised payment system is to enhance monitoring of payment trends and strengthen capabilities in detecting and addressing fraudulent transactions.

Credit Card Payments Through PhonePe, Cred & Bill Desk To Be Halted After This Date–Check When

June 21, 2024, 4:58 pm

India’s central bank, the Reserve Bank of India has recently issued an order, which now mandates that all credit card payments will now go through Bharat Bill Payment System (BBPS) after June 30.

Thus, affecting major companies like PhonePe, Cred, BillDesk and Infibeam Avenues, as these fintech companies, will not be able to process payments on credit card dues just after June 30. Now, lenders need to comply with the rule by the above-mentioned date to operate seamlessly.

As a result, the payment is now seeking the extension of deadline by 90 days. ‘The payments industry has sought extension of the deadline by 90 days.’ said chief of big payment company (quoted by ET).

According to ET report, out of 34 banks, only 8 banks have started issuing bill payments on BBPS.

The banks who have activated the BBPS are SBI Card, BoB Card, IndusInd Bank, Federal Bank, and Kotak Mahindra Bank.

Currently, big banks like HDFC, ICICI and Axis Bank have not yet activated BBPS. And so far, it has provided combined 5 crore credit cards to customers.

Why RBI Has Centralized Credit Cards Payments

According to industrial experts, this rule is supposed to give RBI a 360 view and better visibility on payment trends.

Besides, better visibility, this will allow RBI to properly track and solve fraudulent transactions.

What Is Bharat Bill Payment System?

Bharat Bill Payment System refers to an integrated online platform, which was developed by National Payments Corporation of India.

This platform functions as one-stop system for payment of all bills. Thus, providing interconnected and accessible ‘Anytime Anywhere” Bill payment service’ to customers of India.

BharatPe and PhonePe Settle Long-Standing ‘Pe’ Trademark Dispute

May 26, 2024, 6:54 pm

BharatPe Group and PhonePe Group have announced the amicable resolution of their long-standing legal disputes concerning the use of the suffix ‘Pe’ trademark. The two companies have been embroiled in extensive legal battles over the trademark for the past five years. This settlement marks the end of all ongoing judicial proceedings.

As part of the agreement, both parties have begun withdrawing their respective oppositions in the trademark registry, facilitating the registration of their respective ‘Pe’ trademarks. Additionally, both companies will take the necessary steps to comply with the settlement agreement’s obligations concerning cases before the Delhi High Court and Bombay High Court.

Rajnish Kumar, Chairman of BharatPe’s Board, stated, “This is a positive development for the industry. I appreciate the maturity and professionalism shown by the management of both sides, working closely to resolve all outstanding legal issues and moving ahead to focus their energy and resources on building robust digital payment ecosystems.”

Sameer Nigam, Founder and CEO of PhonePe, expressed his satisfaction with the resolution, saying, “I am glad that we have reached an amicable resolution in this matter. This outcome will benefit both companies as we move forward and focus our collective energy on growing the Indian fintech industry as a whole. I would like to thank Mr. Rajnish Kumar and his team for working with us to achieve this positive outcome.”

NPCI Likely To Extend UPI Deadline, Offering Boost To Google, PhonePe

May 10, 2024, 4:05 am

The National Payments Corporation of India (NPCI) plans to postpone the deadline for enforcing a 30% market share limit on firms handling payments via the Unified Payment Interface (UPI) by one to two years, according to sources familiar with the matter who told reuters. This move is anticipated to favor Google Pay and PhonePe, backed by Walmart, as they currently hold significant dominance in the UPI payments sector.

India’s leading digital payment system, UPI, manages more than 11 billion transactions monthly. PhonePe commands a market share of 48.3%, closely trailed by Google Pay at 37.4%. Conversely, regulatory hurdles have caused Paytm’s share to decline to 8%. Initially slated for implementation in January 2021, NPCI postponed the market share cap deadline to January 1, 2025. Sources suggest that a final decision regarding the extension will be announced closer to the revised deadline.

Difficulties Encountered in Implementing Incentives for UPI Service Providers

The proposed extension of the deadline is likely to draw criticism from other stakeholders in the ecosystem who have been urging NPCI to adhere to its commitments. Some companies have put forward suggestions, including incentives favoring smaller players. NPCI and the Reserve Bank of India (RBI) encounter obstacles in introducing additional incentives for UPI service providers. Unlike credit card issuers such as Mastercard and Visa, which impose fees on merchants for consumer transactions, UPI operates essentially cost-free for merchants.

NPCI had anticipated that Meta’s WhatsApp, which also facilitates UPI payments, would help disrupt the duopoly. However, as of April this year, the app had only captured a 0.2% market share.

Sources indicate that the RBI convened a meeting on Wednesday with key stakeholders in the UPI ecosystem to deliberate on strategies for scaling UPI infrastructure, diversifying the product portfolio, addressing challenges, and exploring solutions. An NPCI spokesperson declined to comment on queries regarding market share, and sources suggest that the regulator may revise its plan by the year’s end.

Flipkart valuation decreases by more than ₹41,000 crore

March 18, 2024, 10:17 am

According to information derived from transactions conducted by its parent company Walmart in the United States, the valuation of the e-commerce giant Flipkart has experienced a decline, decreasing by $5 billion or approximately ₹41,000 crore since January 2022.

As of January 31, 2024, Flipkart’s valuation is reported at $35 billion, down from $40 billion in FY22, reflecting changes in Walmart’s equity structure. The decline in value is primarily attributed to the separation of fintech firm PhonePe into an independent entity. However, sources suggest that Flipkart’s current valuation falls within the range of $38-40 billion.

Walmart’s equity transactions shed light on these changes. In FY2022, Walmart diluted 8 percent of its equity in Flipkart for $3.2 billion, valuing Flipkart at $40 billion. Conversely, in FY2024, Walmart increased its stake by 10 percent to about 85 percent, paying $3.5 billion, indicating Flipkart’s valuation at $35 billion.

Walmart clarified its actions, stating, “During fiscal 2024, the company paid $3.5 billion to acquire shares from certain Flipkart noncontrolling interest holders and settle the liability to former noncontrolling interest holders of PhonePe.” Flipkart disputes the reported valuation decrease by Walmart, asserting that it was an “appropriate adjustment” following PhonePe’s separation in 2023.

Flipkart insiders maintain that the company’s organic valuation has remained steady since 2021, with PhonePe’s value factored into the valuation exercise. PhonePe, now valued at over $12 billion, attracted investments totaling $850 million from various investors.

Despite the reported valuation dip, Flipkart sources highlight significant year-over-year growth in Gross Merchandise Value (GMV) in 2023, estimated at 25-28 percent YoY to $29-30 billion. This growth, driven by increased festival sales compared to 2022, could positively impact Flipkart’s valuation.

In FY23, Flipkart reported a net loss of ₹4,846 crore and a consolidated net income of ₹56,012.8 crore, with total expenses amounting to ₹60,858 crore. Despite financial challenges, Flipkart’s GMV growth and near profitability indicate resilience in its market performance.

New Regulations and Changes in UPI Transactions Effective From Today

January 1, 2024, 4:15 pm

Starting January 1, 2024, the Reserve Bank of India (RBI) has implemented several measures to enhance and regulate the Unified Payments Interface (UPI), a rapidly growing mode of immediate money transfers through mobile devices in the country.

To broaden the scope of UPI payments, the National Payments Corporation of India (NPCI) has directed payment apps and banks, including Google Pay, Paytm, and PhonePe, to deactivate UPI IDs and numbers inactive for over a year. Additionally, the daily payment limit for UPI transactions is capped at ₹1 lakh.

However, exceptions have been made, and on December 8, 2023, RBI increased the transaction limit for UPI payments to hospitals and educational institutions to ₹5 lakh. Meanwhile, a 1.1% interchange fee will be applicable on specific merchant UPI transactions exceeding ₹2,000 and made using prepaid payment instruments (PPI), such as online wallets.

In response to the rising instances of online payment fraud, a four-hour time limit will be imposed each time a user initiates the first payment exceeding ₹2,000 to another user with whom they have not previously transacted. The introduction of the UPI ‘Tap and Pay’ functionality is anticipated to go live for UPI members soon.

Moreover, a collaboration between RBI and the Japanese company Hitachi will bring UPI ATMs to various locations in India. With this, users can scan a QR code to withdraw cash directly from their bank accounts.

The Unified Payments Interface (UPI) has witnessed tremendous growth, crossing 10 billion transactions in August 2023. The new regulations aim to streamline and secure UPI transactions, making it a more efficient and reliable mode of digital payments in India.

RBI Raises UPI Payment Limits for Hospitals and Educational to Rs 5 lakh

December 8, 2023, 12:53 pm

In a major decision, the RBI on Friday announced to raise the UPI payment limit to hospitals and educational institutions to Rs 5 lakh from Rs 1 lakh presently and hiked the cap for e-mandates for recurring payments to Rs 1 lakh.

Unveiling the December bi-monthly monetary policy, Reserve Bank Governor Shaktikanta Das said the limit for various categories of Unified Payments Interface (UPI) transactions has been reviewed from time to time.

“It is now proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction,” he said.

PhonePe responds ‘may take legal action’ to MP Congress’ on alleged usage of brand logo

June 29, 2023, 1:29 pm

PhonePe, a fintech services company, has responded to what it calls “unauthorized usage” of its brand by the Madhya Pradesh Congress, stating that it may take legal action against them.

Posters depicting Madhya Pradesh Chief Minister Shivraj Singh Chouhan, supposedly saying, “Pay 50% (commission) and get your work done,” have been placed across Gwalior town. Such posters were also seen in Chindwara, Rewa, Satna, and Bhopal, the state capital, before being removed by the administration.

The posters take the style of QR code sheets, which fintech companies use to process online payments. ‘PhonePe’ was prominently written on the top of those posters.

“PhonePe objects to the unauthorized usage of its brand logo, by any third party, be it political or non-political. We are not associated with any political campaign or party,” PhonePe posted on its Twitter handle.

“The PhonePe logo is a registered trademark of our company and any unauthorized use of PhonePe’s intellectual property rights will invite legal action. We humbly request Madhya Pradesh Congress to remove the posters and banners featuring our brand logo and colour,” it said, tagging the Twitter handle of the party’s state unit.

Meanwhile, a FIR has been filed at Padav Police Station against unidentified individuals who put the posters, and the police are looking for them.

According to Rajesh Singh Chandel, SP Gwalior, a BJP worker filed a complaint alleging that his party was defamed, and as a result, a case was filed against an unknown person and an investigation is underway.