One97 Communications owned Paytm Payments bank will leverage Unified Payment Interface (UPI) to enable users to transact using a virtual payment address issued by it.
According to some media reports, Paytm Bank will go live on UPI by August this year.
“We will soon enable seamless creation of UPI IDs on our platform so that users can send and receive money to each other, and for merchant payments. It will be one of the most important components of our payments platform and enable us to bring cost-efficient digital payment services to every Indian,“ Renu Satti, CEO of Paytm Payments Bank, said to The Economic Times.
Using virtual payment address, merchants will also be able to accept payments over UPI.
This move by Paytm Bank seems to be steered by growing usages of UPI recently. According to the apex banking body, Reserve Bank of India (RBI) – total funds transacted over UPI grew to $359 million in March from only $15 million in November 2016, when the government slapped demonetisation.
Last year, the government floated Bharat Interface for Money (BHIM app), which has amassed over 20 million downloads and accounts for about 40 percent of all UPI driven transactions. It launched another UPI-based app Aadhar Pay targeted at merchants in April.
Besides BHIM, Flipkart-backed PhonePe claims to have a nearly 38 percent share of total UPI transactions. Overall, PhonePe registered 3.5 million UPI transactions in May.
Unlike PhonePe and BHIM, Paytm would be leveraging its merchant base to gain traction on UPI.
“Paytm owns the country’s largest payment ecosystem with a vast loyal consumer base and more than 5 million offline mere factors will offer us the edge once chants. These factors will offer us the edge once we launch UPI on our platform,“ Satti said.
Paytm’s move to make debut on UPI makes a lot of sense, and expected to gain fast paced traction given its mammoth consumer and merchant base. Paytm app had about 225 million customers before it started porting users to Paytm Payments Bank.