PhonePe Decides To Exit Account Aggregator Business

SUMMARY

“We have decided to surrender our NBFC-AA licence to the RBI, and initiated the wind down of our AA operations,” said PhonePe in a statement

The company cited its inability to onboard a sufficient number of financial information providers (FIPs) to its platform

PhonePe will be partnering with other AAs in the market to bolster financial inclusion.

Fintech major PhonePe has decided to exit its Account Aggregator (AA) business and will be partnering with other AAs in the market.

“We have decided to surrender our NBFC-AA licence to the RBI, and initiated the wind down of our AA operations,” said PhonePe in a statement.

The company cited its inability to onboard a sufficient number of financial information providers (FIPs) to its platform as the rationale behind the decision to exit AA business.

In June 2023, PhonePe received its NBFC-AA licence to build its own Account Aggregator platform, besides end consumer (B2C) products. Two years after getting licence, PhonePe’s AA platform had more than 5 Cr registered users.

“Due to competing priorities we have not been able to onboard as many financial information providers (FIPs) to our platform as we would have liked,” the statement added.

The company also mentioned in its statement that it will inform this decision to the platform’s user base soon and “help them as per regulatory guidelines.”

In the financial year (FY24), PhonePe’s revenue crossed INR 5000 mark, claiming that it turned profitable before ESOP costs.

PhonePe’s pincode in November last year joined the quick commerce race. The app was piloting a quick delivery service in parts of Bengaluru, Delhi NCR, Mumbai, Pune, Hyderabad and Varanasi to deliver groceries and other products in 10-20 minutes.

In December last year, it was reported that the digital payments giant will discontinue all third-party partnerships and integrations with payment aggregators, including SoftBank-backed payment orchestration platform Juspay.

The recent development came at a time when PhonePe is consistently expanding beyond a digital payment platform. It has an insurance aggregator platform, PhonePe Insurance, a merchant lending platform, PhonePe Lending, a stock broking platform, Share.Market, an appstore for android devices, Indus Appstore and an ecommerce platform Pincode.

In the digital payment landscape, PhonePe maintained its dominant position in the month of December last year as it clocked 798.4 Cr transactions.