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RBI allows Paytm to migrate UPI payment business to other banks

Economic TimesEconomic Times · 1y ago
RBI allows Paytm to migrate UPI payment business to other banks
Medial

The Reserve Bank of India (RBI) has approved the transfer of Paytm's UPI-based payments business from Paytm Payments Bank to four to five other banks. Paytm has been asked to stop onboarding new users until the migration is complete. The RBI has also asked Paytm to create settlement accounts with one or two banks to ensure merchant payments continue uninterrupted. Paytm is in the process of migrating accounts to Axis Bank. The National Payments Corporation of India (NPCI) has been asked to consider Paytm's request to become a Third-Party Application Provider (TPAP) for UPI operations. Several major banks, including HDFC Bank, Axis Bank, Yes Bank, and ICICI Bank, are expected to become payment service provider banks for Paytm. The clarification from the RBI will allow banks to enter the Paytm business. Additionally, banks may require fresh Know Your Customer (KYC) details from merchants to prevent fraudulent activities. The RBI directive puts Paytm on the same footing as competitors such as Google Pay, Amazon Pay, and PhonePe, who offer UPI-based payment services.

Neobank Muvin shuts down operations

EntrackrEntrackr · 1y ago
Neobank Muvin shuts down operations
Medial

Youth-focused neobanking startup Muvin has shut down its operations, according to sources aware of the development and the company’s communication with its users. The shutdown is a result of the RBI direction which forbade UPI in a co-branding arrangement. “muvin card program has been closed. Any available balance is being migrated to issuer Livquik app. The migration is expected to be finished by 1st Feb and we would notify nextsteps to access your balance. Thank you for the support and we regret that muvin is unable to support your journey towards financial literacy,” said a notification sent by Muvin to its users. The Muvin app was also not available on Google Play Store. In June 2023, RBI directed PPI issuers to stop UPI in a co-branding arrangement. The directive forced DreamX (Dream11), Fampay, Akudo, Muvin and CheqUPI to discontinue UPI services as they did not hold PPI license. Entrackr had exclusively reported about this in June 2023. Recently, Akudo also shut down its wallet operations. Besides Muvin, LivQuik was also a PPI issuer for Akudo. Fampay, the largest player in this space, also pivoted to a full-fledged neobank from a teen only due to RBI directive. The firm also found it tough to raise follow-on money and saw top level exits and fired nearly 80 employees in 2023. Entrackr has reached out to Muvin and Livquick for more details. Co-founded by Vineet Gupta and Mukund Rao, Muvin used to cater to both teens and young adults through its prepaid card and mobile app. Before winding up operations, Muvin raised $3 million in a pre-Series A round led by WaterBridge Ventures in January 2022 and a seed round of over $1 million in April 2021.

Exclusive: Fampay launches UPI app Namaspay for foreign travelers in India

EntrackrEntrackr · 10m ago
Exclusive: Fampay launches UPI app Namaspay for foreign travelers in India
Medial

Fampay by Trio has been looking at avenues to make money, and the firm has launched a unified payment interface (UPI)-powered payment app -Namaspay for foreign travelers in India. Namaspay is a separate app which allows travelers across continents including Europe, Africa, Australia, and the US. The app charges Rs 1,650 as one time registration fees along with 4% and 1% on money loading and withdrawal, respectively. Namaspay seems to be a well positioned offering as the UPI-powered payment apps have almost replaced cash in the urban regions. The NPCI-owned payment railroad processed nearly 15 billion transactions in August. Since UPI is accepted almost everywhere and weeds out cash carrying requirements, there is definitely a case for it to offer a version for foreign tourists. More importantly, UPI remains a negligible contributor to revenues or profitability to the players associated with it. A Namaspay kind of app for foreign travelers has sizable potential to fill the profitability gap fonally. To a large extent, this [UPI for foreigners] is a white space in the UPI as Cheq is probably the only competition for Namaspay. For context, India received 92 million foreign tourists in 2023. Most of these tourists either use plastic money or cash for payments. Hence, there seems to be an opportunity for players like Namaspay and Cheq. However, experts outline that if this [UPI for foreigners] would emerge as a lucrative space, large players including PhonePe and Paytm will push their offerings as well. Namaspay appears to be an attempt by Fampay’s parent to explore more use-cases around UPI ecosystem. More importantly, there is no predicting how NPCI will react to the move to monetise it more strongly, with every likelihood of it trying to set benchmarks there as well. Fampay which was started as teen-centric neo-banking platform but it pivoted to become a full-fledged UPI app (like PhonePe and Paytm). The company blew over Rs 200 crore to build a fintech offering for the population below 18 years of age. The firm, which raised $38 million in series A round, reported less than Rs 15 crore in revenue in its lifetime. Fampay processed 52 million transactions via UPI in July. The company has demonstrated rapid growth as it managed to climb to top 10 list within a year of full-fledged pivot. Namaspay is owned by Pehe via its subsidiary TrioTech where Fampay’s co-founders Sambhav Jain and Kush Taneja are listed as owners, according to its regulatory filings.

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