Rivals irked by PhonePe's 'ATM' business, question launch in absence of regulations

An ATM service started by PhonePe, called PhonePe ATM, has angered the company’s rivals. They have raised objections against its launch before the National Payments Corporation of India (NPCI).

The PhonePe ATM is a service that lets users withdraw cash from its offline merchants via the Unified Payments Interface (UPI). In a committee meeting with the NPCI, PhonePe’s rivals such as Paytm questioned PhonePe’s launch of the service without any regulatory framework on cash withdrawal through UPI.

NPCI is yet to formulate norms for cash withdrawal at point-of-sale (PoS) machines using the UPI platform, though a report in  The Times of India suggests that NPCI is now working on framing guidelines for the same.

“It has to be dealt with carefully since some stakeholders can misuse the cash withdrawal without adequate checks and balances. Banks are pushing to levy a charge, which PhonePe is resisting. PhonePe’s UPI rivals are contesting that everyone should be given an equal opportunity when adequate guidelines are not in place,” a source said.

The ATM-like service clocked in 1 lakh withdrawals over February 14 and 15 and is available with a million merchants across India. PhonePe has 10 million merchants all over the country in total.