India fintech roundup: Tolls shun ewallets, but banks, rickshaws, and Micromax embrace it

Payment gateways, ewallets, banks, microlenders… the list of fintech players in India goes on and on. It’s an exciting time and something new seems to happen every day. Here’s our weekly roundup of what’s happening in this fast-moving space.

Unified Payment Interface to go live next week

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The National Payment Corporation of India (NPCI)’s much awaited UPI (Unified Payment Interface) will officially go live next week. The UPI is a technology that lets people transfer money between banks with just a single identifier, like a phone number or an Aadhar number (a government biometric identification scheme that just signed on a billion people).

The release date has been changed several times, from April 8th to the 11th to “sometime next week”.

While it’s been unclear for a while whether the UPI will include ewallets, this week has brought a lot more clarity in terms of how it will work exactly. 29 banks have signed up with it and many payment startups like Paytm and Freecharge have come forth to vocalize their support for the platform, which means that the UPI will probably work with ewallets.

They haven’t started using the technology yet, but EzeTap, a startup that sells devices that can turn any mobile phone into a point-of-sale terminal, just announced UPI support.

Flipkart bought a startup last week that uses the UPI to conduct payments.

Others are less excited about it, including those that see it as a threat to ewallets. Ewallets came up in India as a response to annoying bank procedures, so the belief is that they might lose customers as these procedures go away.

See: India makes a big move toward a cashless society

NPCI shuts payment wallets out of tolls

Photo credit: Herry Lawford.

The Indian government is launching an electronic toll collection system through its highway management agency, NHAI (National Highways Authority of India). It announced plans to introduce scannable tags so cars won’t have to stop when they approach a tollbooth.

The NPCI will run the financial aspect of the initiative, and it’s decided to ban everything that’s not a bank from working at these tolls. That includes ewallets like Paytm and payment gateways like Citrus Pay. This is a blow to startups that handle payments because tolls collect a staggering amount of money.

In 2014, the NHAI recieved a reported US$9.6 billion in toll money just between April 1 and September 30. That’s a lot of money to handle, and a big chunk of the sector for fintech startups to miss out on.

Pay rickshaw drivers with FreeCharge

Banks are helping fintech startups accelerate

India’s Micromax doesn’t want to lose, gets into fintech