Looking for a piece of the action in the digital payments space, Flipkart on Sunday rolled out its Unified Payments Interface (UPI) service for online and offline payments in collaboration with Axis Bank.
Currently available for Android smartphone users via the Flipkart app, customers can create a new UPI ID for fund transfers and in-app payments. Potential users include Flipkart’s 500 million registered users and 1.4 million sellers on its marketplace.
The entry of a new product in the UPI space comes against the backdrop of the Reserve Bank of India’s directive to Paytm Payments Bank to virtually discontinue operations post March 15.
Paytm Payments Bank had a share of just 13% of UPI volumes in December, as per data from National Payments Corporation of India (NPCI). The market is dominated by PhonePe, which commanded 46% of the volumes in December while GooglePay had a share of 36%. These shares may have risen post January after the RBI’s directive to Paytm.
Both Flipkart and PhonePe, which recently launched an Android-based store called Indus Appstore taking on Google’s Play Store, are promoted by Walmart.
NPCI has been attempting to restrict the market shares of individual players in the UPI space to 30% but has delayed the enforcement of the rules to end of this year. With the absence of Paytm Payments Bank, it will be harder for NPCI to enforce the cap.
February recorded a slight decrease in UPI transactions in both volume and value terms, NPCI data showed. The number of UPI transactions for the month stood at 12.1 billion compared to 12.2 billion in January while the transaction value was `18.28 trillion, down from `18.41 trillion in January. However, the payments made through UPI saw a 61% year-on-year growth in volume and a 48% year-on-year growth in transaction value, NPCI said.
Flipkart’s UPI handle will make it less dependent on third-party UPI apps such as Paytm, PhonePe, Google Pay and Amazon Pay. Customers can create a UPI ID on the Flipkart app to make payments to both merchants and individuals and also pay bills without switching apps.
The handle can be used across Myntra, Flipkart Wholesale, Flipkart Health+ and Cleartrip. Recently, food delivery major Zomato launched a UPI service. Rivals Amazon and Tata Neu already have UPI handles as do WhatsApp and MakeMyTrip.
“The launch of Flipkart UPI seamlessly merges the convenience and cost-effectiveness of UPI with the trusted efficiency customers expect from us,” Dheeraj Aneja, senior VP, fintech and payments group, Flipkart, said.
Sanjeev Moghe, president and head, cards & payments, Axis Bank, said the lender continued to scale the growth in UPI with partnerships and innovations. “Our partnership with Flipkart has come a long way from launching one of India’s most successful co-branded credit cards to now launching the Flipkart UPI service,” Moghe said.