Banks vs e-Wallets: Who Is Winning in Cashless India?

Friday, January 20, 2017

When two of the biggest banks in the country resist wallets from fintech start-ups, you know a few things are simmering. First, SBI disallowed its net banking users to top up third party wallets and next, ICICI blocked transactions on PhonePe, a Flipkart managed wallet that was launched in partnership with YES Bank – PhonePe allows users to link bank accounts to the smartphone through the National Payments Corporation of India’s encrypted software.

While SBI cited security concerns, ICICI said PhonePe was “following restrictive practices allowing users to make payments with only its UPI handle which is in contravention to the UPI guidelines of interoperability…”

While security concerns could be real, there is more to it than meets the eye. There is an imminent threat from fintech start-ups to the Indian financial services industry as we see growing disintermediation in mobile payments, financial product comparison/aggregation, lending, and remittances.

Source: Business Today (link opens in a new window)