Within 100 hours of the Reserve Bank of India placing a moratorium on Yes Bank on March 5, Cashfree, a digital payments company, migrated more than 1 million Yes Bank UPI handles to ICICI bank. “Around 70% of all services were affected after the announcement of the moratorium. Within 1-2 hours, we rerouted most of the transactions through other banks,” Reeju Datta, the co-founder of Cashfree, told MediaNama. Unlike PhonePe, that was similarly affected by this moratorium, Cashfree had multiple acquiring banks including IndusInd Bank and HDFC Bank. However, “this [migration to ICICI Bank] is an interim measure, not a permanent one,” Datta said. He did not clarify what a permanent measure would be.

This migration to ICICI Bank was necessary because Yes Bank’s QR codes which were deployed in the field (such as in kirana stores), would have turned non-functional without the migration, Datta told us. In fact, the QR codes/UPI handles were non-functional for some time as the migration took place, he said. “Without migration to ICICI Bank, we would have had to replace all of them physically,” he said. All of Cashfree’s UPI handles are business handles used by kirana stores, etc., but handled by its merchants such as KhataBook.

For this migration to happen, the National Payments Corporation of India (NPCI) had asked Yes Bank for a no objection certification, that the bank provided. ICICI Bank had already consented to it. Datta clarified that consent was not needed from the kirana stores, but from Cashfree’s merchants, such as KhataBook, who operate the QR codes. “In fact, the merchants pushed us to migrate the UPI handles,” he told us. The payments platform has more than 500 merchants on Auto Collect, its service through which payments, loan payments, utility bill payments, etc. are processed.

Phone restores UPI services

PhonePe, which had Yes Bank was its sole acquiring bank, restored all its services late on March 7 with ICICI Bank as its new UPI partner, after going down for some time following the Yes Bank moratorium. As of March 9, PhonePe was reportedly in talks with the State Bank of India to onboard it as another partner. ICICI Bank is currently the partner bank for processing UPI transactions for Google Pay, Truecaller, MakeMyTrip, MI Pay, and WhatsApp’s pilot UPI payments service.

On March 2, the NPCI had mandated that large third-party app providers offering UPI payments must do so with multiple banks, instead of relying on a single bank as their acquirer/payments services provider. The regulator said large third-party app providers have to work with a minimum of three sponsor banks, and a maximum of 10 banks, within 6 months of them becoming a third-party app provider. A payments app becomes such a provider when they process over 5% of the total monthly volume/value of all UPI payments. NPCI will reserve the right to mandate systemically large TPAPs (Third-party app providers) to on-board multi-bank right from the time the service goes live.