5 top digital payments players boosting UPI transactions in India

By Edil Corneille

The adoption of digital payments in India has been booming with customers preferring to use this mode to make transactions amid the COVID-19 era. This trend is expected to continue as individuals are becoming increasingly familiar with the payment methods and are realising the convenience of making payments digitally.

In India, Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood. The National Payments Corporation of India (NPCI) has changed the way payments are being made in the country through UPI.

Earlier this month, NPCI, the umbrella body of all retail payments in India, announced a cap of 30 per cent of the total volume of transactions processed in UPI for third party app providers from January 1, 2021. This is due to the growth in UPI payments which has reached 2 billion transactions a month. The cap will be calculated looking at the total volume of transactions processed in UPI during the preceding 3 months, and providers exceeding the specified cap will have a period of 2 years from January to comply. Mentioned below are the companies that are enabling digital transactions in the country through the UPI system.

Google Pay

With Google Pay, individuals can send and receive money, recharge their mobiles, and make payments digitally. Google Pay is said to create a faster and more secure payment experience for online retailers too. It allows customers to make payments online using the UPI mechanism.

The Google Pay Payment Request API doesn’t require the use of a particular payment system. It’s an open and cross-browser standard that replaces traditional checkout flows by allowing retailers to request and accept any payment in a single API call. The browser over here acts as the go-between for retailers, users, and payment methods.

Individuals can send or receive money with zero fees, straight from their bank account to almost anyone, with Google Pay. They can send or receive money even if their contact is not on Google Pay. The money is said to be protected with a security system that helps detect fraud and prevents hacking. Google Pay accounts can be safeguarded with a screen lock.

Jio Payments Bank

Reliance Industries Limited was granted an in-principle approval by the Reserve Bank of India (RBI), the central bank of the country, to establish a new payments bank under the Banking Regulation Act, 1949. It then partnered with the State Bank of India to support this initiative of building payments bank capabilities and accordingly, Jio Payments Bank Limited, was incorporated in November 2016.

Customers of Jio Payments Bank can make bill payments digitally in a single click, earn interest on their account balances, and also make payments through the @jio UPI handle.

With the track record of the Reliance Group in chosen areas of businesses and large scale roll-outs, the payments bank initiative is seen by Reliance as a significant opportunity to make an impact on India’s financial inclusion landscape to co-create an eco-system which provides accessible, simple and affordable banking solutions.

Paytm

Noida-based Paytm offers multi-source and multi-destination payment solutions. It offers comprehensive payment solutions to over 8 million merchants and allows consumers to make payments between any bank accounts with no fee charged. Owned by mobile-internet firm One97 Communications, Paytm was founded by Vijay Shekhar Sharma. Its investors include SoftBank, SAIF Partners, Alibaba Group and Ant Group.

Paytm is expanding financial support to MSMEs and aims to disburse INR 10 billion in loans by March 2021. The company has equipped over 17 million merchant partners across India with Paytm All-in-One QR enabling them to accept payments through Paytm wallet, bank accounts (both proprietary and third party), UPI and Rupay Cards directly into their bank accounts with no fees charged.

The digital payments company announced the launch of Payout Links for businesses this month, thereby enabling businesses to instantly process payouts to customers, employees and vendors, without the requirement of collecting the bank details. Recently, Paytm reported a 2x growth in digital gold transactions during the last six months.

PhonePe

The Bengaluru-based company announced this month that it crossed the 250 million user milestone. PhonePe CEO and Founder Sameer Nigam apprised that the next target of the company is to cross 500 million registered users by Dec 2022. PhonePe aims to enable digital payment acceptance across every merchant in every village and town in India.

PhonePe enables the adoption of digital payments for customers across age groups, urban and rural areas, and income levels. The company attributes this growth to be driven by payment success rates, speed of transactions and an easy-to-use user interface of the PhonePe app.

In October, PhonePe had 100 million monthly active users (MAU), 2.3 billion app sessions, 925 million transactions, an annual TPV run-rate of $277 billion and it processed 835 million UPI transactions for a market share of over 40 per cent.

WhatsApp

Earlier this month, Facebook-owned messaging platform WhatsApp, received regulatory approval by the NPCI to go live with its payments feature WhatsApp Pay, using the UPI to allow account-to-account transactions in India. The approval came after months of regulatory hurdles related to data localisation and data privacy.

WhatsApp Pay is able to launch UPI payments. However, it will only be allowed to extend the service to 20 million of its 400 million registered users in the region. WhatsApp is working with ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank.

People can send money on WhatsApp to anyone using a UPI supported app. Payments is designed with a strong set of security and privacy principles, including entering a personal UPI PIN for each payment. Payments on WhatsApp is now available for people on the latest version of the iPhone and Android app.