The on-demand taxi booking service Uber which came into RBI scanner due to its payment mechanism and was given time till November 30th to comply with the Indian laws, has finally got a solution for the same. Uber is now tying up with Paytm to offer the services of a semi-closed wallet.
The wallet will work through the mobile app and will let riders pay for their trips without using cash.
The existing Uber users will require to sign into the Uber app again where they will be prompted to sign into the Paytm wallet as a two-step process.
Uber was facing a tough time in the country after the RBI declared that it is now mandatory for companies to follow a two-step authentication process for credit card transactions. Uber is known for providing ease to its customers while making payments, as users don’t need to make the payment after the ride ends and the fare use to get deducted directly from the credit card and all the transactions use to get executed using an international gateway, thus there was no need for a two-step verification which indeed is mandatory by RBI.
Under the new mechanism, the two-factor authentication will have to be done only at the time of loading or recharging the virtual wallet accounts, and not after each ride and the fare will be auto-debited from the wallets.
“Customers can now pay with multiple systems including debit cards, credit cards and net banking,’ said Vijay Shekhar Sharma, founder and managing director of Paytm.
Bhavik Rathod, Uber’s general manager in Bangalore said that this is Uber’s first step towards localizing Uber and enhancing its reach in the country. He also said that even the consumers who do not have credit cards could now avail of its services, after a tie-up with Paytm.
The new payment system will go live today i.e. 13th November, however, the company will continue the present payment system for customers till November 30 for a smooth transition.nd these transactions use to get the USP of Uber, was in cted directly from the credit card. with Paytm to offer the service
“With the Paytm tie-up more than 600 Mn people who have bank accounts and net banking, will be able to enjoy the seamless and the cashless experience that credit card users experience with Uber. It’s a fully in-app wallet customised experience, which is a great example of the importance of the Indian market,” Allen Penn of Uber told ET.
Uber was launched in India last year, and since it has launched its cheaper line of Uber X, it has registered more than 40% month-on-month growth. Currently, it has presence in 10 cities with more than 15,000 drivers in the country and is expanding rapidly.
The Indian taxi market is estimated to be worth about $9 Bn (INR 54,000 Cr.), of which only 4-6% is organised. There are around 2.3 Mn taxis registered in India with players like Meru, OlaCabs, TaxiForSure, among others. Recently, OlaCabs and Meru has also in-app wallet.
According to reports, Uber might invest over $400 Mn in India.
Recently, Uber has rolled out vehicle financing for partner drivers, highlighting India’s strategic importance in Uber’s worldwide footprint. Making India 1st country in Asia and 2nd country outside the US where it offers this service. For this, Uber has partnered with top lending companies like Shriram Finance, AU Financiers and Toyota Financial Services and have created vehicle financing schemes with low down payment (as low as INR 60,000), superior finance rates and faster turn-around time, exclusive to Uber. In addition to the superior financing schemes, it has also worked out exclusive discounts on vehicles with leading auto companies like Mahindra, Maruti Suzuki, Tata Motors, and Toyota.
“With Vehicle Financing, Uber takes a large step forward in its endeavour to create entrepreneurs in every section of society. We have now empowered individuals and have created an ecosystem that will enable hundreds of thousands of Indians to become new business owners,” said Uber.