How PhonePe finding loopholes in NPCI guidelines to make customers pay for digital payments & recharges

New Delhi: Walmart-owned digital payments firm PhonePe continues to charge customers for recharges and bill payments, going against regulatory guidelines. Recently, RBI and NPCI had issued directions to all Third Party Aggregators and Member banks to not charge any additional fee (other than customer convenience fee) on BBPS transactions.

Not just that this is a clear violation of regulatory guidelines, it is also creating inconvenience for users, where they have to pay an extra amount to the company. This also goes against the government's ideology of keeping digital payments in India, especially UPI as a public good and free for all.

BBPS-Bharat Bill Payment System is an NPCI initiative to enable users to pay all kinds of recurring bill payments through a single platform. While players like Paytm had immediately blocked the charging of platform fee on BBPS, PhonePe continues to charge users. As per media reports, PhonePe has said that it is charging in the cases where it has built direct connectivity with the biller without going through BBPS. But actually Phonepe is charging "Platform Fee" for the BBPS categories as Mobile Prepaid charges and Credit card bill payments. Furthermore, the company in a statement to TOI has said that it will seek NPCI to standardising platform fees.

Phonepe connects billers (such as airtel prepaid) through direct integration for bill payments, instead of encouraging billers to onboard on BBPS as the biller category is opened by NPCI and RBI. By directly onboarding billers, it is able to charge users for recharges and credit card payments. PhonePe, which has a majority share in UPI, has also failed to adhere to NPCI's market cap guidelines for UPI. In November 2020, the NPCI had announced that there will be a market cap on UPI transactions done by third party apps. Following the capping announcement, NPCI had then laid the rules for a three-layered warning for crossing the

30 per cent limit for digital payment apps effective from January 2021. If players fail to comply with the market capping, .once they cross the threshold they would not be allowed to onboard new users.

However, even after a year of the capping, players like PhonePe and Google Pay continue to bend the rules and hold as much as 80 per cent of the market share, as

per reports.