Axis Bank and mobile wallet FreeCharge have partnered to allow its users to make payments through the Unified Payments Interface (UPI). Through this, FreeCharge users will be allowed to load money into their wallets through the UPI option which will be powered by Axis Bank’s SDK.
It’s worth remembering that the National Payments Corporation of India (NPCI) had said that wallets were not allowed to be a part of the UPI as banks needed time to catch up to them in terms of services. However, they could sign on with banks as merchants.
UPI is a payments architecture that will allow users to make a transaction without divulging their account via aliases (such as shashidhar@hdfcbank) and will allow pull-based payments. More on that here.
Note that FreeCharge launched its wallet services in association with YES Bank in September 2015. It’s strange that YES Bank’s SDK for the UPI was not used instead. YES Bank had said that it would be looking at rolling out some UPI services including merchant integrated In-app payments, cab payments for taxi aggregator apps, partnership led model for granular merchant acquisition without the need for physical POS or MPOS, P2P(Peer to Peer) funds transfer, Chat and Pay option with messenger Apps.
Charges for the UPI
Since FreeCharge will be a merchant for Axis Bank’s UPI, they charges will be limited to the merchant discount rate (MDR) as on cards. The MDR fees is distributed between the issuing bank, receiving bank and part of it will be given to the network as fees. More on that here.
Yesterday, Raghuram Rajan, the governor of the RBI said that UPI will be functional by the end of the month, as indicated by this BusinessLine report. Fifteen banks will be going live with their apps for the UPI by the end of the month, Banking Technology reported. Dilip Asbe, COO of the NPCI said that the banks have already developed the applications and were in the final stages of testing.