Linking maps with UPI poses challenges; government meets VPN companies today and e-commerce sales are back

On Wednesday, when the Reserve Bank of India announced that users of the unified payment interface would soon be able to link their credit cards to the popular payment system, the fintech industry rejoiced. But many executives have also told us that the RBI’s plan to allow credit card payments on UPI presents several challenges and that more clarity is needed on a number of issues.

Also in this letter:
■ MeitY will discuss new cybersecurity rules with VPN firms
■ Banking and e-commerce metaverses come to life
■ Online electronics discounts are back as sales slow

Credit card payments on UPI present many challenges for fintech companies

Even though the fintech industry applauds the RBI’s decision to allow credit cards to be linked to the Unified Payment Interface (UPI), it faces challenges regarding consent architecture, guidelines Merchant Know-Your-Customer (KYC) and Zero Merchant Discount Rate (MDR) regime for UPI.

MDR is a commission that merchants are charged by their issuing bank for accepting customer payments via credit and debit cards. There is currently no MDR for UPI payments.

RBIs will undoubtedly boost the credit card industry as well as line of credit digital fintechs that have ventured into payments via card-based offerings.

UPI extends its lead on the charts

Yes, but: Several fintech executives we spoke to said that fully rolling out UPI credit card payments would take at least six months and that several questions remained unanswered.

While the RBI and the National Payments Corporation of India (NPCI), which operates UPI, are expected to release operational guidelines soon, adding UPI card payments may require significant upgrades to UPI infrastructure, several said. fintech leaders and entrepreneurs. we.

Consent architecture, KYC upgrades: Executives of point-of-sale fintechs and UPI payment apps we spoke to said that merchant guidelines for KYC for credit cards and UPI are very different. Merchants who accept credit cards must follow a very strict KYC process on the part of the acquirer, which includes providing a GST number, to streamline chargebacks and counter fraudulent payments.

This means that third-party UPI apps such as PhonePe, Paytm, and Google Pay may need to redo their KYC for merchants and upgrade their technology for stricter KYC.

Great: But the biggest challenge for the industry will be reaching consensus on MDR for credit card payments on UPI. Who will bear the cost of MDR, which is charged on credit card payments but not on UPI?

MeitY will discuss new cybersecurity rules with VPN companies on Friday

Rajeev Chandrasekhar

The Ministry of Electronics and Information Technology (MeitY) has invited VPN companies, technology policy groups, legal experts and cybersecurity experts to a consultation on Friday to discuss various aspects of the latest guidelines from the India’s Computer Emergency Response Team (Cert-In) on cybersecurity, sources told us.

The consultation is expected to be chaired by the Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar. It was planned by the Ministry of IT in response to a joint letter sent by technology policy groups such as The Dialogue, AccessNow, Internet Freedom Foundation,, BSA India and others.

The meeting comes just days after two VPN companies, Surfshark and ExpressVPN, shut down their servers in India, rejecting a government mandate to store their customers’ details, including their names, addresses and the purpose for which they were using a vpn service.

Quotation: “Politicians from various companies will also be present. There will be discussions primarily about the Cert-In guidelines, and whether they have had a negative impact on the startup ecosystem. We also expect senior officials from other ministries to attend,” a source said.

Repel: In addition to VPN companies, technology policy groups and various cybersecurity and legal experts have criticized the new guidelines.

But so far, the government has stuck to its guns. Chandrasekhar said recently that companies that do not wish to adhere to Cert-In guidelines are free to leave India.

Banking and e-commerce metaverses come to life


The Metaverse – a collection of futuristic virtual spaces that combine aspects of the digital and physical worlds – is increasingly attracting traditional businesses. The trend is partly driven by FOMO (fear of missing out) about the next big way to engage with audiences.

Dedicated metaverses for industries such as e-commerce and banking are coming to life as businesses turn to virtual environments for engagement and lead generation.

Who does what : While the Metaverse, as conceived by CEOs and tech pundits – as a fully realized virtual world that is destined to eventually replace today’s Internet – is far from manifesting, many rudimentary versions of it have emerged, led by virtual reality (VR) games. .

In April, e-commerce platform Flipkart launched Flipkart Labs to test Web3 and Metaverse use cases., a provider of digital solutions for financial institutions, last week launched a banking metaverse in which it will build secure 3D virtual environments for banks to create lifelike experiences for its customers.

FMCG brands like McCain, Tata Tea, ITC and Cadbury de Mondelez are doubling down on their investments in the metaverse to increase their customer acquisition and brand engagement, as we reported on April 2.

Online electronics discounts are back as sales slow


Discounts for consumer electronics have returned to e-commerce platforms after a two-year hiatus as sales of TVs, smartphones and refrigerators slowed.

While in big cities pent-up demand has been exhausted and consumers have diverted spending to travel and dining out, for consumers in small towns and rural areas, overall inflationary pressure has eroded discretionary spending. .

“Discounts have made a comeback and will continue through the festive season as brands need to create demand and grow their business,” said Pradeep Jain, managing director of Jaina Group, which sells the Karbonn and Sansui brands.

Industry executives said Amazon and Flipkart had lined up some sales through August, with the flagship Amazon Prime Day sale slated for late next month. The first and biggest online holiday holiday sale is scheduled for the last week of September.

Smartphones and electronics will be the targeted segment during the sales period, industry executives said. Even in the ongoing monsoon sale, discounts on these categories have made a comeback.


Beauty retailer Purplle is India’s second startup unicorn this week


Online beauty and personal care retailer Purplle has raised $33 million from Paramark Ventures at a valuation of $1.1 billion.

Two in one: This makes it the 17th Indian tech startup to become a unicorn this year, and the second this week after online education company Physics Wallah, amid a funding winter in the global startup ecosystem.

Indian startup unicorns in 2022

Existing investors Premji Invest, Blume Ventures and Kedaara Capital also participated in the round. The company has raised $215 million to date, including this round. Its first investors are Goldman Sachs and Verlinvest.

The company, which competes with its biggest rival Nykaa, has seven million monthly active users and more than 1,000 brands on its platform, including five private labels.

It said its annualized gross merchandise value was $180 million for fiscal year 2022. It has 2,400 employees.

Disturbed : The online beauty market, traditionally dominated by large multinationals, has seen startups like The Good Glamm Group, Sugar Cosmetics and Mamaearth raise substantial funds over the past two years.

Closed deals ETtech


■ Fintech start-ups Credit raised Rs 617 crore (about $80 million) in the first tranche of its latest funding round, according to documents filed with the Ministry of Corporate Affairs. The company told us it was raising $140 million in a mix of primary and secondary funding, which would value it at around $6.4 billion.

SolarSquare, a business-to-consumer (B2C) solar startup, raised $4 million, led by venture capital firm Good Capital. Lowercarbon Capital, based in the United States, Symphony Asia, based in Singapore, and Rainmatter, co-founder of Zerodha, Nithin Kamath, also participated in the round.

Other Top Stories by our journalists

IT sector

IT companies prepare for growth: IT process management services are expected to show some level of recessionary impact on growth in the short to medium term, as concerns about inflation and recession increase in the United States and Europe, the largest markets for TCS, Infosys and Wipro.

Equinix will invest $86 million in a third data center: Digital infrastructure company Equinix said it will invest more than $86 million to build its third international trade exchange (IBX) data center in Mumbai. Called MB3, the first phase is expected to open in the second quarter of 2024.

TCS is well positioned to grow, says N Chandrasekaran: Tata Sons Chairman N Chandrasekaran has warned of a “stagflationary impulse” in the context of the Russian-Ukrainian conflict. Addressing TCS’ 27th Annual General Meeting, he said the company was well positioned to capitalize on the demand for digital solutions in this environment.

Global Choices We Read

■ What does “technology company” still mean? (Rest of the world)
■ NASA joins UFO hunt (The Washington Post)
■ Supply shortage looms for world’s most advanced chips (WSJ)

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