As per an official statement, ICICI customers have not been able to facilitate payments via PhonePe since last week. According to sources close to the development, around 6,000 transactions originating from PhonePe which uses the Yes Bank handle has been blocked by ICICI Bank. PhonePe has entered into a strategic partnership with Yes Bank for UPI (Unified Payment Interface) transactions.
Commenting on the development, an ICICI official spokesperson told ET, “Some banks, including us, have raised security-related concerns at appropriate forums about the access to UPI data to a non-banking application. Furthermore, this entity 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. Pending the resolution of these concerns, we have temporarily declined to undertake UPI transactions originating from this entity.”
PhonePe was conceptualised in 2015 by former Flipkart employees Sameer Nigam, Burzin Engineer, and Rahul Chari. The startup is a mobile payments app that allows users to transfer money instantly from their smartphones by using their unique identification number (Aadhaar), mobile phone number or a virtual payment address. It was acquired by Flipkart, in April 2016, for an undisclosed amount.
PhonePe’s CEO Sameer Nigam criticised the move and said, “Such unilateral actions will hinder UPI adoption.” He also said that PhonePe had not received any official complaint from ICICI. “We followed all the detailed guidelines and procedures laid down by the NPCI for an app to go live on UPI. We went through over a 100 plus use case test cases, detailed certification, vulnerability assessment, penetration testing and third-party application security testing, before NPCI gave us permission to go live,” he added.
In the wake of the recent digitisation drive in India, there have been a lot of developments in the space of digital wallets and UPI. With customer preference shifting away from traditional banking to Internet banking, few banks have already initiated such developments, such as SBI launched SBI Buddy, Citibank India and MasterCard launched Citi MasterPass, and ICICI Bank introduced digital payments product named Pockets.