Consumer-to-consumer payments company Instamojo has partnered with ICICI Bank to enable payments via the Unified Payments Interface (UPI). Banks are tying up with payment intermediary companies in an effort to build up a merchant base for the UPI. With this tie up, Instamojo will have UPI as a payment option along with credit and debit cards, netbanking and wallets.
CEO Sampad Swain told MediaNama that they have a revenue sharing agreement with the bank for every UPI transaction through their merchant base, but declined to give specifics. Note that banks are allowed to charge a higher fee for UPI transactions carried out by merchants as compared to for P2P payments. The company charges a flat 2% and Rs 3 on every transaction. Instamojo has more than 150,000 individuals and micro SMEs on its platform and treats all of them as merchants.
Note that the UPI also allows for pull-based transactions which can simplify a lot subscription payments. In May last year, Instamojo launched Instapay, a payment method that lets users collect payments using their usernames. The UPI would simplify this further as customers can pay for subscriptions by entering their mPIN to authenticate the transaction rather than go through an OTP as it is in the case of card transactions.
Push for P2M payments by the NPCI: In an earlier event this month, Dilip Asbe, COO of the NPCI, had said that it is more concerned with person-to-merchant (P2M) payments via the UPI to drive usage. “P2P transactions are not that frequent from a consumer standpoint. It happens once or twice in a month,” he added.
Funding: In Novemner 2014, Instamojo had raised an undisclosed amount of investment in a Series A round of funding from Kalaari Capital and other investors like Blume Ventures, 500Startups and others Prior to this, it had raised around $500,000 from 500 Startups, Blume Ventures and angel investors like Rajan Anandan, Sunil Kalra, Dave McClure, Rob de Heus, Thijs Gitmans, Pankaj Jain, among others.