Amazon India may soon enable payments via the Unified Payments Interface (UPI) channel for purchases made on its website, AP Hota, MD & CEO, National Payments Corporation of India (NPCI), told FE.
Amazon is expected to join the UPI ecosystem in another month. “The development is on, but they have not announced the date as yet. Once they come in, UPI acceptance would happen,” Hota said.
Currently, consumers shopping on Flipkart can make payments using the UPI app PhonePe. Around 40% of all UPI transactions by volume are originated on PhonePe. NPCI plans to reduce the charges that banks pay it for IMPS (Immediate Payment Service) for transactions of less than Rs 1,000 to 25 paise from 50 paise. This is subject to banks waiving interchange on such transactions. “The idea is to make all such transactions free,” Hota said.
NPCI has also approached the Reserve Bank of India (RBI) asking for Google India to be allowed to enable transactions through UPI. “I understand that the RBI has had a first round of meetings with banks to understand what Google is trying to do,” Hota said, adding, “I believe the discussions are very positive.”
Given Google’s size, multiple banks may partner with it in the UPI ecosystem; currently, e-commerce or fintech players are partnering with a single bank. Currently, there are 16-17 non-bank wallet apps through which UPI payments can be made.
NPCI has also proposed a bigger reward for Bharat Interface for Money (BHIM) referrals to Rs 25 from Rs 10. At present, once a person completes three transactions on the BHIM app, he/she earns a cashback of Rs 25, while the referrer earns Rs 10.
The government has budgeted Rs 495 crore for promoting digital payments, of which Rs 27 crore has been spent so far. Hota attributed the low spends to the paltry reward amounts for referrals.
Of the total kitty, Rs 50 crore has been earmarked for advertising and marketing spends.
The UPI app was launched in August, 2016; volumes have risen to 10.2 million in June from 0.3 million in November, aided in large part by the buzz around the launch of the BHIM app in December. At present, roughly 45% of UPI transactions come from BHIM. BHIM expanded the base of UPI users as it can also be enabled for use on feature phones.