Tatas to join the UPI payment club with own app

Bengaluru: Top digital payment apps, such as Google Pay, PhonePe, Amazon Pay and Paytm, may soon have a brand new competitor in a century-old conglomerate that virtually chronicled India’s journey into industrial adulthood – the Tatas.

The storied salt-to-steel conglomerate is seeking clearance from National Payments Corporation of India (NPCI) to start operating on the Unified Payments Interface (UPI) as a third-party payments service provider offering digital payments services, people briefed on the matter told ET.

This is part of Tata Group’s wider plans to have a meaningful presence in the internet economy. The Tata Group, through its digital commerce unit Tata Digital, is in talks with private lender ICICI Bank to power its UPI infrastructure, sources aware of the matter said. It has also held discussions with another leading private sector lender as an additional banking partner, sources aware of the matter told ET.

Non-banking platforms such as Phon
ePe and Google Pay have to partner with banks to get access to UPI railroads. Owing to the technology-focused approach to serve consumers better, non-banking apps have fared better on UPI, cornering most of the market share. For instance, PhonePe and GooglePay have the lion’s share of UPI transactions each month while Amazon Pay, Paytm and Facebook-owned WhatsApp Pay are the other prominent apps.

UPI apps, especially when they are dealing with large transaction volumes, opt to work with multiple banks to share the load. For instance, GooglePay offers UPI through State Bank of India, HDFC Bank and ICICI Bank.

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“The Tatas have applied to the NPCI to operate as TPAP (Third Party Application Providers) and are hoping it can go live next month,” a person aware of the matter said.

This comes when Tatt Digital has also finalised plans to
launch its much-awaited Superapp Tata Neu next month, coinciding its launch with the Indian Premier League (IPL), ET reported on March 15. “They (Tata group) want to have this ready by the time Tata Neu is launched so more UPI payments can be enabled across the superapp with ease,” one of the people mentioned above said.

In February, UPI saw 4.52 billion transactions in total, as per data from NPCI.

Emails sent to Tata Digital and ICICI Bank didn’t elicit any response. A spokesperson at NPCI didn’t immediately comment on the matter.

ET had reported in January that
Tata Digital had set up a new financial marketplace entity Tata Fintechto offer multiple financial products, including a retail payment gateway.

For the Tata Group, an entry on the UPI network is a natural extension of its ambitious online commerce play where UPI payments can enhance the shopping experience. For instance, Amazon India also has its own UPI service that offers users cashback and other incentives.

Interestingly, if the Tatas are given the clearance, it will add an additional dimension to the much debated market share cap issue of UPI. NPCI has mandated new players cannot process more than 30% of the total transaction volumes of UPI during the preceding three months by a single player. However, existing players such as PhonePe and Google Pay were given time until the end of 2022 to comply with the order.

Walmart and Flipkart-owned PhonePe’s
Sameer Nigam had told ET in September last year he wasn’t worried about the market share cap and that he was complying with all the rules and there is little he can do to reduce his own market share. “I would like to believe that this is now user preference starting to play out based on success rate (of transactions) and acceptance,” he had told ET at the time.

WhatsApp Pay is among the major new players on UPI. Last year in November, NPCI allowed WhatsApp Pay to be scaled up to 40 million users from the earlier limit of 20 million users.

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