A number of startups including payment firms PhonePe and BharatPe faced outages after their banking partner Yes Bank was placed under moratorium by the central bank till April 3. No Unified Payment Interface (UPI) transactions are happening since last night on PhonePe, many users of the app confirmed.
Entrackr’s team too encountered the same issue when it tried processing UPI transactions on the app.
Sameer Nigam, the founder and CEO of PhonePe, took to Twitter and expressed regret over the long outage their customers faced. “Entire team’s been working all night to get services back up asap. We hope to be live in a few hours,” he said.
PhonePe’s competitor BharatPe’s users too faced the same issues. However, BharatPe’s services were only partially hit as it has ICICI Bank as its other banking partner.
PhonePe and BharatPe contribute a major chunk in Yes Bank’s UPI volume. PhonePe, the Flipkart-owned digital payments firm, focuses on UPI-enabled peer-to-merchant (P2M) as well as peer-to-peer (P2P) payments, while BharatPe only offers P2M payments under its platform.
Several other startups who partner Yes Bank like CRED, Udaan, Neo-bank, Cashfree, MakeMyTrip, Myntra, Ezetap and Swiggy among many others, who have Yes Bank for supporting UPI payments, are said to be hit.
However, CRED founder Kunal Shah in a tweet said that his platform has no impact on its settlements and business due to ongoing Yes Bank crisis.
Entrackr is still awaiting a response from most of the major abovementioned startups in this regard. We will update the post when they do. Many observers of the industry said that startups facilitating UPI through Yes Bank have now started the process of migration from the bank.
The outage will likely lead to a significant decline in UPI transactions for the month. Earlier for January, Yes Bank outran all the leading private banks, contributing over 39% of the total transactions registered on UPI.
The private sector lender processed 514 million transactions out of 1.3 billion (1305.02 million) UPI transactions for the month. In the last five months, UPI has consistently grown in volume as well as in transaction value.
Meanwhile, post the announcement of the moratorium, Yes Bank’s online banking website has been unresponsive since last night.
Currently, under the terms of the moratorium, Yes Bank account holders can withdraw not more than Rs 50,000 till April 3. And according to media reports, SBI and LIC are likely to take over the bank.
Update: We have updated the news article with the addition of more names of startups being impacted by Yes Bank moratorium.