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PhonePe Gets In-Principle Approval From RBI To Launch Account Aggregator Platform

PhonePe Gets In-Principle Approval From RBI To Launch Account Aggregator Platform

Account aggregators enable instant exchange of financial data between the financial information users (FIUs) and financial information providers (FIPs) with customers consent

PhonePe has also received board approval to set up a mutual fund business or asset management company

PhonePe in the month of July continued to dominate the UPI market with INR 2.88 Lakh Cr customer transactions

Bengaluru- based digital payments firm PhonePe has received an in-principle approval to operate as an account aggregator from the Reserve Bank of India (RBI).  The licence will now allow PhonePe to launch its account aggregator platform that will enable free and instant exchange of financial data between the financial information users (FIUs) and financial information providers (FIPs) with consent from customers. PhonePe claims that it will empower users to avail financial services. Commenting on the development Rahul Chari CTO and cofounder of PhonePe said that PhonePe is looking forward to working closely with all the industry stakeholders.

The central bank in 2016 approved a new class of NBFCs to act as account aggregators. The main responsibilities of the account aggregator are to provide services based on the explicit consent of individual clients. RBI had then strictly asked account aggregators to not collect any financial information of the customer shared by the financial information providers. Financial information providers are ideally banks, mutual fund houses, tax/gst platforms, insurance providers among others. Whereas, financial information users are wealth and finance management services, robo advisors among others. 

PhonePe, which was acquired by Flipkart in 2016 continues to stay in ahead among other UPI platforms owning 47.61% of market share by value and 46.9% by volume of transactions. In the month of July, PhonePe claimed to have processed customer transactions worth INR 2.88 Lakh Cr. Google Pay which trails PhonePe witnessed 2.3 Lakh Cr  worth of customer transactions processed during the same period of time. In a recent event, Walmart president and CEO Dough McMillon at a virtual event had said that he was excited about the Flipkart and PhonePe leadership teams, their associates and the businesses that are being built in India. He said that PhonePe has over 300 Mn users which is an ‘amazing’ number.  

Earlier Inc42 had exclusively reported that PhonePe has also received approval from its board to set up a mutual fund business or asset management company (AMC). According to the company filings, accessed by Inc42, PhonePe is looking to allow itself to become a sponsor or promoter to a mutual fund, investment trust, or asset manager or incorporate and/or acquire asset management companies. In the coming month, PhonePe is likely to seek the approval of Securities and Exchange Board of India (SEBI) next to launch its AMC business.