Ride-hailing company Uber has integrated the Unified Payment Interface (UPI) on its platform. This will allow riders who already have virtual payment addresses for UPI transactions to pay for their rides using the bank-to-bank payment platform.
Inc42 had reported earlier that Uber is expected to launch UPI in a few weeks, wherein it will offer UPI through BHIM. As per the National Payments Corporation of India (NPCI) Managing Director and Chief Executive A.P. Hota, “Since about 60% of these cabs drivers still get paid in cash by customers, UPI payments will help Uber’s drivers make their payments to Uber using UPI.”
Uber’s Indian rival Ola had integrated it in April this year.
Consequently, users can locate it as a payment option in the ‘Payment’ tab of the Uber app, once you tap on the ‘Add Payment Method’ button. A user is then asked to enter his/her UPI ID. Uber charges INR 1 to authenticate the ID, which is then reimbursed. After that, one gets an SMS from the UPI service provider and has to authenticate the payment separately.
The feature is currently rolling out in stages, and it is not available to all Uber users.
An Uber spokesperson stated, “We are currently evaluating the possibilities around a comprehensive UPI integration and continuing to engage with the relevant stakeholders. As a first step, we are pleased to be offering our riders the option to use their existing UPI IDs to pay for their Uber rides. As a technology driven company, we applaud the potential and impact that fin-tech innovations like UPI can make. UPI is the future of Indian payments and we are proud to be a partner in this monumental mission of the government to facilitate digital payments led society.”
While Uber may have given yet another payment choice to customers, the question remains: will customers get accustomed to the smoother Paytm wallet? Paying through UPI at the moment is still a cumbersome process with the need to authenticate each transaction using a UPI app. The one advantage where it scores over Paytm is that, since it’s linked to the user’s bank account, it does not require a minimum balance. On the other hand, for Paytm, the minimum balance to book a cab is INR 350. Users cannot book a cab unless the Paytm balance is more than the minimum balance limit.
Uber and Paytm go back a long way, precisely to 2014, when Uber tied up with Paytm to offer the services of a semi-closed wallet. The move came after the ride-hailing app was facing a tough time in the country after the RBI declared it mandatory for companies to follow a two-step authentication process for credit card transactions. The integration with Paytm enabled Uber users to do the two-factor authentication only at the time of loading or recharging the virtual wallet accounts. This there was no need to authenticate after each ride, and the fare was auto-debited from the wallets.
This move comes at a time when banks are also looking to capitalise on these transactions. For instance, HDFC Bank in June 2017, said that it will levy charges on all such transactions. With the Unified Payments Interface also on its platform, it will be interesting to see if Uber riders will opt for UPI payments over cash and Paytm.
(The development was reported by Medianama)