Flipkart and ICICI are at loggerheads.
ICICI had blocked transactions to Flipkart’s PhonePe app last Friday. After users had reported that their transactions were failing, PhonePe founder Sameer Nigam had taken to Twitter to voice his displeasure. “No intimation. No provocation. Not cool,” he’d said while sharing a picture of a blocked transaction from ICICI.
There had been considerable outrage over ICICI’s move; people had drawn parallels with SBI blocking transfers to wallet providers, and saw ICICI’s decision as a way to stymie a rival’s rapid advances into the payments sector.
ICICI, however, came out with a statement the next day. It said that it was committed to the UPI, and was instrumental in conceiving of the initiative along with NPCI.
“ICICI Bank is among the first few banks to introduce UPI through its mobile banking apps,” ICICI told OfficeChai. “We have also played a key role in conceptualising the UPI initiative along with NPCI to bring in interoperability among banks for ease in payments.” But it alleged that they’d blocked PhonePe’s transactions because it wasn’t playing by the rules. “Some banks including us have raised security related concerns at appropriate forums about the access to UPI data to a non-banking application. Further, this entity is following restrictive practices allowing users to make payments with only its UPI handle, which is in contravention to the UPI guidelines of interoperability and choice that empowers a customer to choose any app to make payments through UPI. Pending resolution of these concerns, we have temporarily declined to undertake UPI transactions originating from this entity.”
Now PhonePe has hit back at ICICI’s explanation. Founder and CEO Sameer Nigam said in an open letter to users that they or their UPI partner YES Bank have not received any official complaint letter from ICICI Bank or NPCI outlining what these alleged violations or concerns are.
“We followed all the detailed guidelines and procedures laid down by NPCI for an app to go live on UPI. We went through over a 100+ use case test cases, detailed certification, vulnerability assessment, penetration testing and third party application security testing, before NPCI gave us permission to go live. PhonePe has been live since August, 2016 and none of these issues have been raised earlier,” he added.
Nigam also claimed that more than 20,000 UPI transactions, amounting to more than Rs. 5 crore by value, have failed due to this action taken by ICICI Bank. “In summary, no one is telling us what the exact issues are, yet ICICI Bank claims the block will stay until the concerns are resolved.” he said in the letter.
As Flipkart and ICICI tussle over the technicalities, the whole episode has has done no favours for the reputation of the government’s UPI initiative. UPI was touted to be a true interoperable framework that would allow people on participating entities to seamlessly transact money with each other, but recent events will lead people to question its basic premise. The issue is serious – the entities involved are big players, and five days have passed since the block was first reported. But there have been no statements from regulatory authorities on how to resolve the situation. While it’s unclear who’ll be the winner in this confrontation – the loser is most likely to be UPI.