Tag: phonepe

PhonePe launches a new wallet auto top-up feature

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Digital payments platform PhonePe has launched a new Wallet Auto Top-up feature using UPI e-mandates for its customers.

The feature will allow PhonePe customers to set up a UPI e-mandate once, after which PhonePe will automatically top up their wallet balance when it falls below a minimum level.

This is meant to ensure a higher transaction rate. PhonePe customers can make multiple payments using their wallet with the new feature without having to top up their wallet balance manually each time.

Once the UPI e-mandate has been set up, users can automatically load their walters and make a payment without needing entering any PIN or waiting for an OTP each time.

The platform is testing this feature end-to-end with the Wallet Auto Top-up launch for PhonePe customers and is also working to make this available to merchants, payment aggregators and other apps in the coming weeks.

In PhonePe, customers can enable Wallet Auto Top-Up by clicking on the ‘Top-Up’ icon in the wallet section on the PhonePe app homepage. Customers then need to enter an amount of their choice to be topped up. A pop-up will be automatically shown to the customers to enable Auto Top-Up. Customers need to enter the Auto Top-Up amount ranging from ₹1,000 to ₹5,000 and click on the ‘Top-Up & Set Auto Top-Up’ wallet option at the bottom of the screen and enter the UPI PIN. On successful confirmation from the customer’s bank, the wallet gets recharged for the chosen amount instantly, and an auto-top up mandate is created.

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Convenience drives millennials to invest in digital gold, BFSI News, ET BFSI

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– By Shashank Singhal

Gold is considered ‘God’s Money’ in India and has been a store of value for over 3000 years. For many investors, allocation to Gold has always been seen as a secure investment option as it may work as an inflation hedge, bears significantly less risk than Indian Stock, diversifies a portfolio, and has high intrinsic value.

Amidst the pandemic when people are hesitant to visit jewellery shops, gold dealers and deal with the downsides of buying gold physically like storage, checking purity, acquiring the gold digitally and online has come as a perfect solution for investors. Digital gold allows the investors to hold physical gold while taking advantage of cutting-edge technology that avoids the hassles of inspecting physical gold for purity and then figuring out a safe storage.

Accounting for roughly 34% of the total population, India has one of the largest millennial populations in the world. Millennials were found investing in the yellow metal more than ever before. Digital gold is gaining traction not only from big cities but also from tier 2 and 3 cities. Terence Lucien, Head of Mutual Funds & Gold, PhonePe said that they have managed to attract customers from 18,500+ pin codes (covering almost 99% of the entire country’s pin codes).

Why are Fintechs tapping it?

As a result of the pandemic, people have learned the value of investing. Gold has traditionally been an important part of every Indian’s investment portfolio. Over the last few years, customers have been increasingly opting for digital gold purchases.

Ashraf Rizvi, Founder & CEO, Digital Swiss Gold & Gilded said, “Gold has and will continue to be part of an Indian investor’s portfolio, and given that gold buying continues throughout the year, digital gold provides convenience that benefits both the customer as well as the provider. Further, the guarantee of purity, safety, and easy reselling of digital gold is driving its demand among customers. As a result, many fintechs are including digital gold in their product portfolio to engage with a new-class of digitally savvy investors.”

Leading stock broker Upstox also offers digital gold as one of its products, Ravi Kumar, Co-founder & CEO at Upstox believes millennial investors have been quite instrumental in spurring investments because of the easy access and safety offered in this mode.

Tier 2 & 3 Cities Driving Growth

There has been an uptick in digital gold demand over the last few months, Terence says, the weight of gold sold by PhonePe in the first few months of 2021 is over 250% of the gold sold during the same period in 2020. He adds “Our customers for Gold belong to various income segments ranging from those who save and accumulate gold by buying small amounts to those with large purchases worth INR 1 lakh per month. Customers now regularly buy gold throughout the year and increase their purchases, during festivals or special occasions such as birthdays, marriages, anniversaries etc. We have seen significant and broad-based adoption of Gold since our launch. Almost 60% of customers who buy Gold on our platform come from Tier 3 cities and beyond.”

Upstox has also witnessed similar trends, Ravi adds, “We have seen 14X growth between December 2020 and May 2021. More than 75% of orders for digital gold are from Tier 2 and Tier 3 towns.”

Partnership Model

Ashraf Rizvi believes that when it comes to digital gold offerings, trust is an important factor, both for the buyer and the provider. Digital Gold providers can partner financial marketplaces and personal finance advisors to offer digital gold as an investment option to their existing client base. FinTech Super Apps is another way for digital gold companies to promote their services.

Ravi from Upstox says while onboarding partners we consider attributes like 24*7 access, transparency, purity of gold and security.

PhonePe has partnered with SafeGold and MMTC-PAMP. Both SafeGold & MMTC-PAMP products (gold coins/bars) are certified for purity by assay certifying agencies. Terence said, “Customers can continue to buy more gold and expand their gold portfolio/savings to fulfil their financial goals, sell it at any time and have their money put into their bank account, and request delivery of gold coins and bars to their doorstep.”

Future Trends

As a commodity gold appeals to both serious investors and traditional buyers. The yellow metal holds sentimental value and is considered to be a lucrative asset in the long run. Terence said, “PhonePe believes that millions of Indians will prefer buying gold digitally due to the high level of trust, convenience, and affordability.”

With respect to partnership trends, Ashraf believes with the overall banking and financial services industry in India undergoing digitisation, personal finance, including gold investment platforms, will also pick-up pace to meet the demands of the new age customer.

Ravi adds that technology has played a significant role in increasing the adoption of this emerging investment instrument and the investment in digital gold will be on an upward trajectory in the coming years.



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PhonePe files plaint with SEBI against Ventureast

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Our Bureau

PhonePe has filed a complaint against Ventureast Proactive Fund-II (VPF), an AIF operating out of India, with SEBI over its planned acquisition of OSLabs.

“The complaint relates to multiple violations of SEBI’s code of conduct in relation to VPF’s recent side dealings with Affle which are a deliberate bad faith attempt to scuttle OSLabs majority acquisition by PhonePe,” it said in a statement.

“VPF has not only broken SEBI’s code of conduct, but it has also acted in complete negligence of its fiduciary duties as a large shareholder of IndusOS,” said Sameer Nigam, CEO and Founder, PhonePe.

“By deliberately derailing PhonePe’s acquisition of IndusOS, a deal which all three OSLabs founders continue to also believe is in their company’s best long-term interests, VPF has also hurt OSLabs’ long term interests,” he further said, adding that it is important to expose such unethical conduct by VPF for the sake of the larger start-up ecosystem.

“We have a very strong case and are confident that we will prevail on both fronts, and hopefully in the process also create a strong deterrent against bad actors trying to bully young startups,” Nigam said in the statement.

The SEBI complaint in India is in addition to a lawsuit that PhonePe has already filed against Ventureast and Affle in the Singapore High Court.

The lawsuit claims that VPF deliberately deceived PhonePe, by continuing to engage PhonePe and OSLabs on the sale of its shares in OSLabs in favour of PhonePe even though it had sold those same shares to Affle in a side deal without OSLabs and PhonePe’s knowledge on a prior date during a legally binding no-shop period, the statement said.

While the legal matters will be settled in court, PhonePe has now approached SEBI to look into these gross ethical violations and dereliction of VPF’s fiduciary duties to protect the interests of OSLabs, its investee company, it added.

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‘Phone pe loan’ bringing credit revolution to hinterland India, BFSI News, ET BFSI

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Banks and NBFCs have struck gold in digital lending, which is driving huge volumes through small loans.

Loans of below Rs 25,000 have grown 23 times since 2017, according to a joint report by Transunion CIBIL and Google.

The report identifies the significance of small ticket less than or equal to Rs 25,000 loans, characterized by searches for “phone on loan”, “laptop on EMI“, and “mahila loan 30,000”.

The share of these loan disbursals amongst all personal loans has gone up from 10 per cent in 2017 to 60 per cent in 2020.

With disbursal speed and convenience being the hallmarks of these loans, the digital-first sellers have the largest share in this category with 97 per cent of all personal loans disbursed by them being under Rs 25,000.

According to TU Cibil in 2020, 38% of loans disbursed to the ‘prime’ credit tier was through fintech NBFCs (non-banking financial companies).

The data shows that those who avail small loans are not less creditworthy.

Additionally, these fintech NBFCs no longer have only ‘urban youth’ as their primary audience — 70% of disbursals are outside tier-1, with 78% of customers being millennials (between 25-45 years of age).

The shift is set to accelerate as reflected by online trends which show that searches outside cities are growing 2.5 times faster as compared to cities.

Searches for loans grew the most in tier-3 cities at 47%, followed by tier-2 (32%) and tier-4 (28%). Indian credit industry stood at $613 billion (Rs 44 lakh crore), which reflects an 18% compounded annual growth rate (CAGR) since 2017. While home loans at $290 billion (Rs 21 lakh crore) form the largest chunk, loan against property and business loans are growing the fastest.

Who is the new borrower?

In 2020, 49 per cent of first-time borrowers were less than 30 years old and 71 per cent were based in non-metro locations, while 24 per cent were women, according to a joint report by Transunion CIBIL and Google titled “Credit Distributed”.

Further, these profiles vary when analyzed at credit product level based on credit appetite, credit experience, credit discipline, and channel of consumption, and have made segmentation increasingly nuanced and complex.

Overall, growth in searches for car loans between the two halves of 2020 grew the fastest at 55 per cent with home loans following with 22 per cent growth.

Loyalty factor pays for fintech NBFCs

Small loan borrowers demonstrate higher loyalty with 42X growth in repeat customer base amongst lenders in CY 2020 versus CY 2017. Moreover, this growth is as high as 64X for digital-first lenders i.e FinTech NBFCs indicating higher stickiness driven by convenience, over the same time period.

Ticket sizes on loan products like personal loans, auto loans and consumer durable loans are geo-agnostic.

In line with the geographical expansion of new digital users in tier 2/3/4 locations and rural India, and a preference for the mother tongue, local language searches for credit showed an exponential increase. Searches in local languages and for translations of terms such as ‘Credit’, ‘Term loan’, and ‘Moratorium‘ have also witnessed an uptick.

Customers rate trust in the brand higher than other traditional parameters like low interest rates, which came second, before recommendations, disbursal time, and online process, all considered to drive value perception with customers.

Sixty-four per cent of credit buyers say that brand is a major factor in choosing their loan provider. Considerable time and effort goes into choosing the lender brand with 76 per cent of borrowers taking a minimum of two weeks between exploration and finally choosing the lender.

Almost a third (32 per cent) of borrowers consider over five providers before proceeding to apply.



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PhonePe, Google Pay continue to be top UPI choices

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PhonePe and Google Pay continued to be the top apps for Unified Payment Interface (UPI) in March this year with collectively nearly 87 per cent of the market share in terms of value of transactions and 79 per cent in terms of volume.

Data released by the National Payments Corporation of India revealed that PhonePe continued to lead the UPI payments space in March processing 1,19.95 crore transactions amounting to ₹2.31-lakh crore. This amounted to 43.91 per cent of the market share in terms of volume in March.

Meanwhile, Google Pay processed 95.7 crore UPI payments amounting to ₹ 2.01-lakh crore last month. This amounted to 35.03 per cent of the market share in terms of volume last month.

Also read: UPI transactions cross ₹5 lakh crore in March

NPCI has recently come out with standard operating procedure for market share cap of third party application providers. It had in November last year announced that a 30 per cent volume cap for third party applications offering UPI, effective January 1, 2021. TPAPs which are exceeding the volume cap as on December 31, 2020, will have a period of two year period to comply with the provisions.

In a new record, UPI processed payments worth ₹ 5.04 lakh crore in March this year, totalling 273.16 crore transactions in terms of volume.

Paytm Payments Bank had 14.7 per cent of the market share in terms of volume with 40.11 crore transactions valued at ₹43,221.25 crore in March. Amazon Pay processed 5.23 crore transactions worth ₹4,457.47 crore while BHIM app process 2.44 crore transactions amounting to ₹7,653.21 crore.

Whatsapp payments registered just 5.8 lakh transactions totalling ₹38.17 crore. Amongst banks, Axis Bank, Yes Bank and ICICI Bank apps saw good traction for UPI payments.

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RBI raises Paytm, wallet accounts limit to Rs 2 lakh; opens RTGS, NEFT connectivity with payment operators

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The RBI also increased the prepaid payment instrument account limit to Rs 2 lakh per individual.
(Image: REUTERS)

The Reserve Bank of India would now allow RTGS and NEFT connectivity with non-bank payment system operators, paving way for UPI interoperability. Along with this, the RBI also increased the maximum balance per customer for payments banks to Rs 2 lakh per individual from Rs 1 lakh earlier. “This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments,” RBI Governor Shaktikanta Das said after the first bi-monthly Monetary Policy Committee meeting of this financial year.

Centralised payment systems such as RTGS and NEFT, operated by the RBI, was so far restricted to only banks with a few exceptions. RBI today announced that it is proposing to enable non-bank payment systems like PPIs, card networks, White label ATM operators, among others to take direct membership in the central bank run RTGS and NEFT. 

RBI had earlier in October 2018 issued guidelines for adoption of inter-operability on a voluntary basis for full KYC PPIs. “As migration toward inter-operability has not been significant, it is now proposed to make inter-operability mandatory for full KYC PPIs and for all payment acceptance infrastructure,” the RBI Governor said. To incentivize the same, RBI will increase the outstanding limit of such PPIs to Rs 2 lakh from the Rs 1 lakh limit earlier. The central bank said that it will issue a separate circular for the changes announced.

Further, in an attempt to incentivised people to carry less cash and consequently perform more digital transactions, RBI has also proposed to allow the facility of cash withdrawal, for full-KYC PPIs of non-bank PPI issuers. 

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Digital payments: India pips China, US, others in 2020; leads global tally with this many transactions

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UPI transaction value witnessed a growth of 18.7 per cent month-on-month to Rs 5.05 lakh crore in March 2021 from Rs 4.25 lakh crore in February 2021.

Amid Covid, India was home to the highest number of real-time online transactions in 2020 ahead of countries such as China and the US. 25.5 billion real-time payments transactions were processed in the country followed by 15.7 billion in China, 6 billion in South Korea, 5.2 billion in Thailand, and 2.8 billion in the UK. Among the top 10 countries, the US was ranked ninth with 1.2 billion transactions. The transaction volume share for instant payments India, among real-time transactions, was 15.6 per cent and 22.9 per cent for other electronic payments in 2020, according to a report by the UK-based payments system company ACI Worldwide. Importantly, paper-based payments continued to have a considerable share of 61.4 percent in India.

However, this is expected to change by 2025 as volume shares for instant payments and other electronic payments are likely to grow to 37.1 per cent and 34.6 per cent respectively. Consequently, the share of paper-based transactions would contract to 28.3 per cent. Moreover, the share of real-time payments volume in overall electronic transactions will exceed 50 per cent by 2024. “India’s journey of creating a digital financial infrastructure has been characterized by collaboration between the government, the regulator, banks, and fintechs. This has helped to advance the country’s goal of enabling financial inclusion and also provided rapid payments digitization for citizens,” said Kaushik Roy, VP and head of product management, Asia, ME and Africa, ACI Worldwide in a statement.

Also read: Radhakishan Damani’s Rs 1,000 crore home: DMart founder buys new property at Mumbai’s Malabar Hill

India’s digital payments market led by Paytm, PhonePe, Pine Labs, Razorpay, BharatPe, and others on the B2C and B2B sides has surged during the pandemic even as incentives such as cash backs, rewards, and offers have helped businesses to attract more customers. Moreover, policy frameworks such as Pre-Paid Instruments (PPI), Universal Payment Interface (UPI) by the NPCI apart from Aadhar, and the launch of BHIM-app have driven the financial inclusion and improved the payment acceptance infrastructure in the country in the past few years.

According to another report by the Indian Private Equity and Venture Capital Association (IVCA) and Ernst & Young, digital payments in India is expected to grow at 27 per cent CAGR during the FY20-25 period from Rs 2,153 lakh crore transactions in FY20 to Rs 7,092 lakh crore in FY25. UPI transaction value witnessed a growth of 18.7 per cent month-on-month to Rs 5.05 lakh crore in March 2021 from Rs 4.25 lakh crore in February 2021 while transaction volume rose by 19 per cent to 2,731.68 million from 2,292.90 million during the said period, according to data released by National Payments Corporation of India (NPCI).

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ICICI Bank, PhonePe partner to issue FASTag

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Private sector lender ICICI Bank and digital payments platform PhonePe have partnered to issue FASTag using UPI on the PhonePe App.

“This integration allows over 28 crore registered PhonePe users to order and track the ICICI Bank FASTag conveniently on the app,” the companies said in a statement on Thursday.

Also read: Retail payments: Half-a-dozen consortiums set to apply for NUE licence

PhonePe users, who may be customers of any bank, will have a fully digitised experience as they don’t have to visit physical stores or toll locations to buy a FASTag. ICICI Bank is the first bank to partner with PhonePe for the issuance of FASTag.

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ICICI Bank and PhonePe partner to issue FASTag, BFSI News, ET BFSI

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Private lender ICICI Bank and digital payments platform PhonePe have tied –up for the issuance of FASTag using UPI on the PhonePe App.

This integration allows over 280 million registered PhonePe users to order and track the ICICI Bank FASTag conveniently on the app.

ICICI Bank is the first bank to partner with PhonePe for the issuance of FASTag.

Sudipta Roy, Head – Unsecured Assets, ICICI Bank said, “This collaboration enables millions of PhonePe customers to easily apply for a new FASTag and get it delivered free of cost at their doorstep. The association comes in handy, even for users, who are not customers of ICICI Bank, as it allows them to order and later recharge with the convenience of UPI. With this, ICICI Bank has achieved another feat in the FASTag ecosystem.”

Roy added, “Our market leadership in value and volume of average daily transactions on FASTag is a testimony of the trust that customers have shown in our rollout. We believe that our latest tie-up with PhonePe will go a long way to make the availability of FASTag even more convenient, digital and frictionless.”

Deep Agrawal, Head – Payments, PhonePe said, “We have already seen a phenomenal response from our users recharging FASTag on our platform, with millions of customers recharging daily on the app. In fact, FASTag recharge has witnessed a 145% growth over the last 3 months indicating increased intercity travel as markets opened up post the lockdown.”

“We are confident that with PhonePe’s reach, superior payment and user experience, we will enable millions of consumers to purchase and use FASTag across the country,” said Agarwal.

Denny Thomas, Head NETC & AEPS, NPCI said, “The partnership of PhonePe and ICICI Bank will definitely increase the adoption of NETC FASTag and facilitate its doorstep delivery to the customers. We believe that this initiative will further deepen the penetration of FASTag across the country and provide the users with a seamless recharge experience through the PhonePe app.”



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Digital payments to skyrocket 3X to over Rs 7,000 lakh cr by FY25; mobile payments to see highest growth

Personal Finance

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The maximum growth is likely to be witnessed in the mobile payments segment at 58 per cent from Rs 25 lakh crore to Rs 245 lakh crore.

The nascent yet fast-evolving digital payments industry in India, propelled by policy framework and technology penetration, is expected to grow at a compound annual growth rate of 27 per cent during the FY20-25 period. The growth in retail electronic payment systems including National Electronic Fund Transfer (NEFT), mobile banking, and development of payment acceptance infrastructure is likely to boost digital payment transactions from Rs 2,153 lakh crore in FY20 to Rs 7,092 lakh crore in FY25, according to the India Trend Book Report 2021 by the Indian Private Equity and Venture Capital Association (IVCA) and Ernst & Young.

The digital payments market, which has been led by companies such as Paytm, PhonePe, Pine Labs, Razorpay, BharatPe, and others on the B2C and B2B sides, has surged expeditiously with businesses offering cash backs, rewards, and offers to woo customers. Moreover, the recent pandemic has stimulated the demand for digital wallets as contactless payment is reckoned as the new normal protocol. Policy frameworks, on the other hand, such as Pre-Paid Instruments (PPI), Universal Payment Interface (UPI) by the NPCI apart from Aadhar, and the launch of BHIM-app have driven the financial inclusion and improved the payment acceptance infrastructure in the country.

In terms of segment-wise growth, the payment gateway aggregator market is expected to grow at around 19 per cent CAGR from Rs 9.5 lakh crore in FY20 to Rs 22.6 lakh crore in FY25 while the merchant payments segment is likely to see 52 per cent growth from Rs 4.7 lakh crore to Rs 33 lakh crore during the said period. The maximum growth is likely to be witnessed in the mobile payments segment at 58 per cent from Rs 25 lakh crore to Rs 245 lakh crore.

Also read: CEA Krishnamurthy Subramanian: Mindset of always asking what govt can do for startups should change

Meanwhile, the overall fintech market, which also catered to online lending, wealth management, insurance technology, etc., is likely to grow from Rs 1.9 lakh crore in 2019 at a CAGR of 22.7 per cent during the period 2020-25. While some fintech subsectors such as MSME digital lending have been facing temporary downturn, others including digital payments and insurtech have benefitted from Covid-induced digital adoption among consumers. According to the IVCA report, India has emerged as Asia’s biggest destination for fintech deals, leaving behind China in the quarter ended June 2020. Amid COVID-19, India saw a 60 per cent YoY increase in fintech investments to $1.5 billion in 1H20.

“Covid-19 pandemic has accelerated the shift toward a more digital world. It has changed the ways businesses were done and technology is at the forefront of these changes. Opportunities for internet and tech companies have increased multifold in the last one year. Wide penetration of internet and lower internet cost has complemented the digital and technology trend for consumers and have changed the ways of shopping, education, agriculture, retail, logistics, finance, health, etc. businesses,” said Ankur Bansal, Co-founder and Director, BlackSoil.

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