Tag: phonepe

Uday Kotak, BFSI News, ET BFSI

Banking & Finance

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Asserting that Indian banks have been behind the curve in tapping payments technology, Kotak Mahindra Bank Managing Director Uday Kotak on Friday said they need to wake up before large parts of the traditional financial markets move out from them. Indian bankers have been short-sighted on the payments business in the last couple of years as they saw no money in payments, Kotak said at Infinity Forum organised by the International Financial Services Centres Authority (IFSCA) and Bloomberg.

As a result, they have allowed the growth of unified payments interface (UPI) payments monopolised by two players, Google Pay and PhonePe which have got 85 per cent market share, he said.

Therefore, it’s a wake-up call for Indian banking, he said: “Wake up, you will see large parts of the traditional financial markets move out.”

Having said that, he said, “We have to keep in mind that consumer tech companies have revenue models outside of finance. For instance, the advertising model or the e-commerce model. Banks, by law, under Section 6 of the Banking Regulation Act cannot get into non-financial business as defined.”

Therefore, there are serious issues about how you are going to draw the lines and simultaneously, there is an issue about financial stability, he said.

“I was reading an article which said that when you put a regulated entity into competition with a fintech or a consumer tech, the standard approach of the consumer tech is to play fast and loose on regulation and gain market share at great speed.

“I am not against competition. All that I’m saying is we need to make sure that in the name of better competitive service, we don’t have a systemic and a stability challenge at the same time,” he said.

Recalling Prime Minister Narendra Modi’s assertion that the most important aspect of digital growth is consumer trust that has to be protected at all costs.

“So, we need to make sure that as we go for fintech and grow it, we must also be clear that we do not betray trust,” he said.

On the homegrown payments ecosystem, Kotak said UPI payments as well as Aadhaar unique identity basis for transactions are remarkable innovations and they could be exported globally.



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Kotak, BFSI News, ET BFSI

Personal Finance

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Mumbai: Veteran banker Uday Kotak on Friday raised several concerns over the domination of Google Pay and PhonePe in the payments business. He said that while banks have been caught napping, policymakers also need to look at the issue from a financial stability point of view.

Speaking at an event organised by India’s International Financial Services Centres Authority and Bloomberg at GIFT City, Kotak said that Indian banks have been behind the curve and have allowed the growth of UPI payments to be monopolised by Google Pay and Walmart-owned PhonePe, who have got 85% of the market.

“It is a wake-up call for Indian banking: Wake up, or you will see a large part of the financial market move out. From a policy and financial stability point of view, which policymakers have to look at,” said Kotak. He said that bankers were shortsighted in the last two years. “They said there is no money in payments and let the payment market be taken by these two-three companies.”

Kotak said that bankers need to keep in mind that consumer tech companies have revenue models outside finance. “For example, the e-commerce model. Banks under section 6 of the Banking Regulation Act cannot get into non-financial business. There are serious issues of how we are going to draw the line and simultaneously there is an issue of financial stability,” said Kotak.

The chief of the country’s third-largest private bank also made a reference to the raising of deposits by payment platform Google Pay and to the central bank’s move to ban first loss default guarantees provided by lending platforms. He said that there was a need to establish who was responsible for the deposits and who was bearing the risk on loan assets.

According to Kotak, a competition between a regulated entity and a fintech or consumer tech usually ends up with the tech company being fast and loose on regulation and gaining market share at great speed. “I am not against competition. All I am saying, in the name of competitive service, we do not have a systemic and stability challenge at the same time,” he said. He urged authorities to take UPI and the Aadhaar-Enabled Payment Systems global. He said that there is already a partnership with Singapore, but there was a need to take this to other developing markets such as Bangladesh and African countries.



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Yes Bank partners Amazon Pay for UPI, chooses AWS for payment processing, BFSI News, ET BFSI

Banking & Finance

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Mumbai: Yes Bank has partnered with Amazon Pay and AWS to offer UPI payment to users. In FY21, Yes Bank recorded a market share of around 40% by volume in the UPI ecosystem and around 30% by volume in the UPI merchant acquiring business thanks to the integration with PhonePe.

The integration with Amazon Pay will enable the US e-commerce giant, which is a late entrant into the payment space, to issue UPI IDs with the @yapl handle. The tie-up will further expand Yes Bank’s presence in UPI with its payment processing platform hosted on AWS.

Based on a multi-bank model, this collaboration allows Yes Bank to acquire merchants through the Amazon Pay platform, adding to its existing merchant network.

The private lender said it has developed a cloud-native UPI processing platform to optimally handle the high traffic of transactions observed during surge periods like festivals or annual sales.

“With this collaboration, we will be able to offer our customers more control, flexibility and choice for a vast range of purchases and peer-to-peer transactions — through UPI-based payments,” said Prashant Kumar, MD & CEO, Yes Bank.

According to Mahendra Nerurkar, CEO and VP, Amazon Pay, the company plans to expand its digital payment network by making it more rewarding for customers. “UPI is one of the most convenient and popular ways to pay in India. With a cloud-native architecture we hope to keep raising the bar on availability, speed and customer experience using UPI through the Amazon app,” said Nerurkar.



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Shares of PB Fintech likely to see limited upside in near term, says JM Financial, BFSI News, ET BFSI

Personal Finance

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PB Fintech, the parent company of PolicyBazaar, made a positive stock market debut with a 17.35% gain on Monday. The listing pop came as a positive surprise to many experts and analysts, however, JM Financial Services expects limited scope for further gains in the stock.

The brokerage has set a price target of Rs 1,270, which implies a near 5 per cent downside from the current market price. “We initiate coverage with a ‘hold’ rating, solely due to premium valuations with significant upside risks in our ‘bull’ scenario that can drive share price to over Rs 2,200 by December 2024,” it said.

Though the brokerage firm sees limited near-term upside against CMP post the strong listing, they reckon there is a likely path for PB Fintech to grow to a valuation of $13.5 billion over the next couple of years against $7.3 billion currently. This is only if few incremental levers fall into place, which are unlikely in the very near-term, the brokerage said.

These levers consist of digital penetration reaching 5.5 per cent against 4.5 per cent.

Shares of PB Fintech likely to see limited upside in near term, says JM Financial

“Policybazaar is the dominant market leader in a large and growing industry with strong tailwinds such as increasing digital penetration, rising disposable income and insurance awareness. We do believe Policybazaar will be in the driving seat in enhancing insurance penetration in India,” JM Financial said

The brokerage firm is of the strong opinion that the company should continue deepening scale moats in light of new-found competition emerging from insurers’ direct channels and cross-sell by fin-tech players like PhonePe and Paytm.

JM Financial expects PB Fintech, PolicyBazaar’s parent, to grow revenues by 31 per cent annually over the next 10 years.

“While we expect slight market share loss in online distribution due to insurers’ investment in direct channel and newer competition, this loss will be aptly compensated by the company’s growth in physical distribution” it added.



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PhonePe surpasses two billion mark in monthly transactions in October

Banking & Finance

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Homegrown digital payments platform PhonePe on Wednesday announced that it has processed over two billion transactions on its platform in October 2021.

The platform had crossed the one billion monthly transaction mark in February this year, and has now hit the two billion milestone in eight months.

It’s significant growth comes on the back of rapid traction across Tier II, Tier III cities and beyond, it said. PhonePe said that it has seen over 145 million monthly active users, $600 billion annualised total payments value (TPV) and digital transactions from over 19000 pin codes.

Sameer Nigam, Founder and CEO, PhonePe said, “Last month was phenomenal for PhonePe, as we processed our highest ever transactions till date, cementing our position as India’s leading payments platform.”

“The fact that 80 per cent of our transactions come from Tier II, Tier III cities and beyond, show that digital payments have truly penetrated across the length and breadth of the country. We will continue to build the most preferred digital payments and financial services destination for a billion plus Indians while transforming lives positively,” added Nigam.

The platform has crossed this milestones as digital payments continue to gain traction.

Amidst festival season sales and opening up of the economy, Unified Payments Interface (UPI) transactions touched a record high at ₹7.71 lakh crore in value terms in October. This marked a new record for UPI, which is fast becoming the most popular choice for digital payments.

It was a 56 per cent jump from ₹6.54 lakh crore in transaction value recorded in September.

According to data recently released by National Payments Corporation of India, the number of transactions on the UPI platform amounted to 421 crore in October, compared to 365 crore in September.

PhonePe and Google Pay continue to maintain their lead as the most popular UPI payment apps, with the two apps enjoying market shares of 44 per cent and 35 per cent, respectively, in the first six months of 2021, according to a recent 2021 India Mobile Payments Market report. Together, the two apps handled more than 12 billion transactions worth $338 billion, as per the report.

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PhonePe on-boards Liberty General Insurance to offer motor insurance

Banking & Finance

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Liberty General Insurance Ltd on Monday announced that it has partnered with PhonePe to offer motor insurance digitally and provide easy accessibility. In 2020, PhonePe ventured into the distribution of insurance and has become one of India’s fastest-growing digital distributors, with the sale of over 5 lakh policies in five months.

Roopam Asthana, CEO & Whole Time Director, Liberty General Insurance said, “With this partnership, Liberty General Insurance strengthens its tie-up with PhonePe to empower their customers with the best protection cover in today’s digital era. Liberty General Insurance has a comprehensive bouquet of insurance products that distinguishes itself from the existing gamut of motor insurance products in the market.

Gunjan Ghai, VP & Head of Insurance, PhonePe added, “We are delighted to partner with Liberty General Insurance to provide motor insurance products to our 32+ crore users. PhonePe users can choose from multiple motor insurance products on our platform and purchase seamlessly in a few clicks. We are committed to build PhonePe as a one-stop destination for all insurance needs and this partnership is another step in that direction.”

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PhonePe launches tokenisation solution – The Hindu BusinessLine

Banking & Finance

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Digital payments major PhonePe on Tuesday announced the launch of PhonePe SafeCard, which is a tokenisation solution for online debit and credit card transactions.

“This solution will enable both PhonePe users and merchant partners to continue experiencing the convenience of saved card transactions with increased security, and in compliance with the new Reserve Bank of India guidelines,” it said in a statement, adding that the solution supports all major card networks such as Mastercard, Rupay and Visa.

SafeCard will also enable PhonePe merchant partners to offer and use tokenisation on their own platforms through a simple Application programming interface (API) integration.

“With this solution, merchant partners can create, process, delete and modify tokens for online card payments with customers’ consent,” it further said.

“PhonePe SafeCard ensures that the added security doesn’t impact the customer experience at all. We are also closely working with our large merchant base to take them live on this platform,” said Ankit Gaur, Director, Online Business, PhonePe.

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Mobile payments surpass credit cards in 2021: Report

Banking & Finance

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Mobile payments in India are now growing faster than card payments as more consumers and businesses adopt digital payments amidst the pandemic, said the 2021 India Mobile Payments Market Report.

According to the report, payments made via apps that bypass credit cards rose 67 per cent to $478 billion in 2020. They are clocking more than $1 trillion in annualised value in 2021.

“…we expect mobile payments to continue to grow faster than cards due to a growing consumer preference to use smartphones to pay,” said the report published by S&P Global Market Intelligence’s Financial Institutions Research team.

By comparison, credit card transaction value in the industry dropped by 14 per cent in fiscal 2021. For banks, the ongoing pandemic shaved off $524 million in credit card interchange revenue according to its estimates, as consumers hunkered down amid lockdown measures.

“Mobile payments in India accelerated their lead over cards amid the Covid-19 pandemic. Large technology companies intermediating mobile payments are becoming financial supermarkets by cultivating partnerships with financial institutions and securing regulatory licenses.”

It also said that demand for cash is slowing in the wake of rising mobile payment adoption. For each ATM withdrawal, Indians made 3.7 transactions using mobile phones in 2020.

It has also forecast that there continues to be room for rapid growth digital payments in India in the next few years.

“Based on a review of instant payments in four large Asia-Pacific economies, India processed the highest number of real-time transactions in 2020,” it said, while noting that the country’s real-time transactions per capita of 16 in 2020 was the lowest in the group, which includes Australia, Thailand and Singapore.

While PhonePe and Google Pay continue to dominate mobile payments, the report said it does not expect India’s mobile payments market to become a duopoly like in mainland China, where Alipay and WeChat process the bulk of mobile payments.

“Payment fintechs with business-to-business models burn significantly less cash than their consumer-facing brethren,” it further said, adding that large fintechs that work closely with large and small enterprises are poised for overseas expansion and business diversification.

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BharatPe opposes PhonePe’s trademark over ‘PE’ usage in Devanagari

Banking & Finance

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Resilient Innovations or BharatPe, which recently launched a ‘buy now pay later’ app under the trademark “postpe”, has filed six cancellation actions against the multiple registrations held by PhonePe for the ‘PE’ device mark in Devanagari script, at the intellectual property division of the Delhi High Court.

“By taking on a trademark for the ‘PE’ device mark in Devanagari script in classes relating to payment services in a country like India, where Hindi is the primary language of the masses, PhonePe has acted against the larger public interest, and Resilient is committed to undoing this,” Resilient Innovations said on Tuesday.

A company statement further said that PhonePe has been asserting its registration for the ‘PE’ device mark in Devanagari script as equivalent to the English word “pay”.

Strong growth in digital payments indicates a lasting shift in consumer payment behaviour

“This was the same position taken by PhonePe in a recent case filed by it before the Bombay High Court against Resilient’s use of the mark ‘postpe’, which stands withdrawn at present,” it further said.

Coming soon, new framework for offline digital payments

Earlier this year, the Delhi High Court had rejected PhonePe’s assertion of exclusivity over the usage ‘PE’ at the interim stage. Even the Bombay High Court rejected PhonePe’s assertion at the interim stage.

“Both courts noted that the word ‘PE’ was prima facie incapable of protection as a trademark standalone,” the company said.

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PhonePe transactions grew 33.6% between July and September

Banking & Finance

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During July to September 2021, PhonePe saw 33.6 per cent growth in transactions from the previous quarter at 526.5 crore, while the value of transactions grew 23.3 per cent to ₹9,21,674 crore.

According to the Q3 (July-September) 2021 data released on PhonePe Pulse — an interactive website with digital payment data, insights and trends in India — money transfers with UPI and merchant payments clocked 221 crore and 231 crore transactions, respectively. Further, offline merchant payments grew faster than online, 65 per cent higher than the previous quarter, marking a period of recovery after the second wave of the pandemic and the rapid reopening of stores.

Coming soon, new framework for offline digital payments

As many as 720 of the country’s 726 districts registered a growth in digital transactions by volume. The number of registered users grew from 30.5 crore to 32.8 crore.

Digital transactions grew 80% in last 250 days: Razorpay report

Karthik Raghupathy, Head of Strategy and Investor Relations at PhonePe, said, “When we launched PhonePe Pulse, we committed to publishing data periodically, and we are delighted to share the insights from the first Pulse data refresh. The rapid growth we are seeing quarter-on-quarter is a strong indicator that digital payments are penetrating across the length and breadth of the country. It is going to be an exciting next quarter with the festivities and the holiday season; we are already looking forward to interesting insights and trends from Q4 2021.”

Launched in September 2021, PhonePe Pulse showcases more than 2,000 crore transactions by consumers on an interactive map of India.

PhonePe says it has over 32.5 crore registered users, who can send and receive money, recharge mobile phones, DTH, data cards, pay at stores, make utility payments, buy gold and make investments. PhonePe ventured into financial services in 2017 with the launch of its Gold platform for buying 24-karat gold. It has since launched mutual funds and insurance products like tax-saving funds, liquid funds, international travel insurance, life insurance, and insurance for the Covid-19 pandemic, among others. PhonePe is accepted at over 2.2 crore merchant outlets across India.

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