PhonePe Group has decided to exit the account aggregator business and surrender its NBFC-AA licence to the Reserve Bank of India (RBI), the company said on February 7, citing a shift in focus to other business areas and a plan to partner with existing aggregators.
The company has started the process of winding down its AA operations and will soon inform its existing user base about the transition.
"Due to competing priorities, we have not been able to onboard as many FIPs to our platform as we would have liked. The good news is that the AA ecosystem itself is flourishing today, and many of the other players are growing exponentially. Therefore PhonePe Group has decided to exit the Account Aggregator business, and instead we will partner with other AAs in the market," the firm said in a statement.
The decision comes almost 18 months after it launched the service via its wholly owned subsidiary, PhonePe Technology Services Pvt Ltd (PTSPL) after securing the licence.
The service allowed consumers to securely share their financial data, including bank statements, insurance policies, and tax filings, with regulated Financial Information Users (FIUs) for loan applications, insurance purchases and investment advisory among others.
It had integrated its AA service within its consumer app, enabling users to create an interoperable AA handle and access bank statements through the “check balance” option free of cost.
PhonePe’s AA platform claims to have registered nearly five crore Indians.
"We strongly believe that growing the AA ecosystem is very important to addressing financial inclusion properly. By 2022, the AA ecosystem was still very nascent and early adoption numbers were still low. So, in June 2023, we got our own AA licence in a bid to build our own Account Aggregator platform and help accelerate the AA ecosystem’s growth. This was a departure from our usual strategy of building only end consumer (B2C) products," it said.
PhonePe said the AA ecosystem has matured significantly, with multiple players now scaling up rapidly. Given the progress, the company chose to pivot to collaborations rather than maintaining its own AA platform.
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