PhonePe partners with ICICI Bank, to continue alliance with Yes Bank

PhonePe on Monday said it is actively working on adding more payment service provider (PSP) partners to offer its users more options for UPI transactions, even as the Flipkart-owned company continues to engage with crisis-ridden Yes Bank.

PhonePe had seen a service outage for nearly 24 hours, which started immediately after the RBI placed Yes Bank on moratorium on March 5. Its team worked overnight with the National Payments Corporation of India (NPCI) and new UPI partner, ICICI bank, to ensure all its services are up within a day.

"We were actively working on adding other PSP partners, this is also as per the recent NPCI advisory... PhonePe will shortly be launching an additional VPA (virtual payment address) with ICICI bank," PhonePe founder and CEO Sameer Nigam told PTI.

He added that once the Yes Bank moratorium is over, "it will mean PhonePe users will have a choice of two handles from two different banks to work with".

Following the moratorium, Yes Bank faced restrictions, including caps on payments that impacted its ability to settle transactions on behalf of partners like PhonePe. Other players like Edenred, which offers services like meal cards, also suffered disruption. Foreign travellers and students who used prepaid forex cards from Yes Bank are also facing issues.

While PhonePe declined to comment on the banks it is in talks with, sources said PhonePe is engaged in dialogue with State Bank of India, HDFC Bank, Axis Bank and RBL Bank.

Nigam said services on the PhonePe app were fully resumed on March 6 for all users and merchant partners, with ICICI bank as our new banking partner.

"All PhonePe consumer @ybl handles are working as before and all 10 million of our merchant QR codes are working seamlessly as well. The platform processed over Rs 4,000 crore worth of transactions in 24 hours and saw its largest-ever volume of user traffic in a single day (with over 70 million app sessions)," he added.

Bengaluru-headquartered PhonePe is the fastest-growing digital payments platform in India with over 200 million registered users. Its platform saw 570 million transactions in February with the number of monthly average users at about 75 million.