Tatas joins the UPI payment club with its own app

Bengaluru: Top digital payment apps, such as Google Pay, PhonePe, Amazon Pay and Paytm, may soon have a brand new competitor in a century-old conglomerate that has all but chronicled India’s journey to industrial manhood – the Tatas.

The incumbent salt to steel conglomerate is seeking clearance from the National Payments Corporation of India (NPCI) to start operating on the Unified Payments Interface (UPI) as a third-party payment service provider offering payment services. digital payment, people knowledgeable about it said. AND.

It’s part of the Tata Group’s broader plans to have a significant presence in the internet economy. The Tata Group, through its digital commerce unit Tata Digital, is in talks with private lender ICICI Bank to power its UPI infrastructure, sources familiar with the matter said. It has also had talks with another top private sector lender as an additional banking partner, sources familiar with the matter told ET.

Non-banking platforms such as Phon
andPe and Google Pay need to partner with banks to get access to UPI railways. Thanks to the technology-driven approach to better serve consumers, non-banking apps fared better on UPI, grabbing most of the market share. For example, PhonePe and GooglePay take the lion’s share of UPI transactions each month, while Amazon Pay, Paytm and Facebook-owned WhatsApp Pay are the other top apps.

UPI applications, especially when processing large volumes of transactions, choose to work with multiple banks to share the load. For example, GooglePay offers UPI through State Bank of India, HDFC Bank, and ICICI Bank.

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“The Tatas have asked NPCI to operate as TPAPs (Third Party Application Providers) and hope they can go live next month,” a person with knowledge of the matter said.

It comes as Tatt Digital has also finalized plans to launch its highly anticipated Tata Neu Superapp next month, coinciding with its launch with the Indian Premier League (IPL), ET reported on March 15. “They (Tata Group) want this ready when Tata Neu launches, more UPI payments can be activated easily on the super app,” said one of the people mentioned above.

In February, UPI recorded 4.52 billion total transactions, according to NPCI data.

Emails sent to Tata Digital and ICICI Bank elicited no response. A spokesperson for the NPCI did not immediately comment on the matter.

ET reported in January that Tata Digital had created a new financial market entity Tata Fintech to offer several financial products, including a retail payment gateway.

For the Tata Group, an entry into the UPI network is a natural extension of its ambitious e-commerce game where UPI payments can enhance the shopping experience. For example, Amazon India also has its own UPI service which offers users cashback and other incentives.

Interestingly, if the Tatas are given permission, it will add an extra dimension to the much-debated issue of capping UPI’s market share. The NPCI required new players to process no more than 30% of UPI’s total transaction volume in the previous three months by any single player. However, existing players such as PhonePe and Google Pay were given until the end of 2022 to comply with the order.

Sameer Nigam of Walmart and Flipkart-owned PhonePe told ET in September last year that he was not worried about the market share cap and was following all the rules and that it could do little to reduce its own market share. “I’d like to believe that now it’s user preference that starts to play out based on (transaction) success rate and acceptance,” he told ET at the time.

WhatsApp Pay is among the major new players on UPI. Last year in November, the NPCI allowed WhatsApp Pay to increase to 40 million users from the previous limit of 20 million users.

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