ICICI Bank has blocked transactions on Flipkart-owned digital payments app PhonePe, accusing it of indulging in restrictive practices and breaking the Unified Payment Interface (UPI) guidelines of interoperability.
The bank began blocking transactions on PhonePe starting Friday, with Flipkart Online CEO Sameer Nigam taking to Twitter to protest the move. He claimed that the bank hadn’t provided the company with any prior warning or information, saying the move was “on purpose”.
ICICI Bank stated: “This entity (PhonePe) is following restrictive practices allowing users to make payments with only its UPI handle, which is in contravention to the UPI guidelines of inter operability and choice that empowers a customer to choose any app to make payments through UPI.”
This is the second instance of mainstream banks blocking services to new-age digital payments companies. Previously,State Bank of India stopped allowing users from topping up their Paytm wallets using the internet banking feature. The bank claimed it did so because of security concerns.
Airtel and Paytm have started their payments bank services, offering customers the same convenience of using a wallet with some benefits of traditional banks, too. Airtel, for instance, will offer users 7.5 per cent interest per annul on money they park in their payments bank/wallet accounts
