NPCI Steps In To Moderate Tug-Of-War Between ICICI Bank And PhonePe
NPCI advised all the banks to adhere to the merchant on-boarding guidelines
The National Payments Corporation of India has asked ICICI Bank Ltd. to restore unified payment interface-based transactions through PhonePe, which the bank had blocked earlier this week.
Based on a review by National Payments Corporation of India (NPCI) on ICICI Bank’s action to block Unified Payments Interface (UPI) transactions made through PhonePe App, we would like to state that ICICI Bank has been advised to open UPI transactions immediately.NPCI Statement
Flipkart-owned PhonePe is a mobile payments company.
The UPI interface, developed by NPCI, is only available to banks at the moment. Others like e-wallets and payment companies can access the UPI platform through their banking partners.
NPCI said that it held discussions on the matter with ICICI Bank and Yes Bank, the banking partner of PhonePe, before arriving at the decision.
“We have also advised banks to adhere to the merchant on-boarding guidelines meticulously from the angle of interoperability of merchant Apps so that such disputes are avoided,” NPCI said in the statement.
The rift emerged earlier this week when it was reported that ICICI bank was blocking PhonePe UPI transactions from going through. This was tweeted by PhonePe’s Chief Executive Officer Sameer Nigam, who said that the bank was doing it “definitely on purpose”.
ICICI Bank, in its defense, has said that it decided to “temporarily decline” transactions through PhonePe since the company was allegedly acting against the UPI guidelines of interoperability while not giving a choice to customers to pay through other modes.
It added that the NPCI had given written assurance to ICICI Bank, that PhonePe will soon allow interoperatibility, following which the lender too will allow UPI transactions from the app.
Note: A day after this report was published, NPCI revised its statement. In a release issued late in the evening on January 20, NPCI noted that PhonePe and Flipkart Apps are in contravention of the UPI guidelines of interoperability. “Hence, NPCI has directed PhonePe and Flipkart to comply with the UPI guidelines and allow payments from UPI handles of all banks on their Apps.” It further added that, simultaneously, ICICI Bank has been requested to allow UPI transactions from PhonePe App as soon as PhonePe and Flipkart start complying with the UPI guidelines on interoperability.
The headline of this report has been changed to reflect NPCI’s altered stance on the issue.