This follows reports from September this year which had suggested that Uber was in talks with Paytm and PayU to integrate a digital wallet with its payment process. Following this tie-up, users can now either make use of Paytm wallet or an International credit card to make payments.
This tie-up was necessitated after Reserve Bank of India (RBI) issued a directive that Card Not Present (CNP) transactions for purchases of goods and services in India had to be processed through Indian banks and payments needed to be made in Rupees in August this year.
This directive was issued to stop the sidestepping of credit card norms by Uber which was earlier circumventing the RBI’s mandated 2-factor authentication by routing their transactions through foreign payment gateways. Uber’s competitor Meru Cabs had asked Reserve Bank Of India (RBI) to extend its recurring billing guidelines to foreign players like Uber in July this year, thereby creating a level playing field among domestic and International players.
It’s also worth noting that Uber primarily acts as a taxi aggregator and doesn’t own these taxis. Hence, a closed wallet cannot be used for making these third party transactions. It would need a semi-closed prepaid wallet license or at least a tie-up with a company which has the same license. Paytm had secured prepaid wallet license from RBI in August last year.
How it works? Users can head over to the payment section on Uber’s mobile app, open a new wallet by tapping on “Add a prepaid wallet” button and recharge their wallet by using their credit card, debit card or net banking account. Existing Paytm wallet users can link their wallet to their Uber account.
Following this, the taxi fare is automatically deducted from the customer’s wallet after ride completion and a receipt is emailed to them. In case the consumer doesn’t have enough balance, an Uber spokesperson told TechCrunch that the account goes into negative balance and they subsequently prompt users to top up the wallet after the ride.
Wallets from other Taxi services
Interestingly, its worth noting that Uber’s competitors Olacabs, Meru Cabs and TaxiForSure have also launched similar prepaid wallets over the last month or so. While Meru Cabs had partnered Citrus Pay to offer this service, there is currently no information on whom Olacabs and TaxiForSure have partnered to offer this wallet service.
– Meru Cabs asks RBI to extend recurring payment rules to foreign players like Uber
– Meru Cabs: usage of foreign payment gateways violated RBI guidelines, FEMA rules
– New RBI restrictions may impact your international online purchases
– On RBI’s online billing guidelines: What about the small merchants?