Walmart-owned PhonePe to enable UPI activation on Aadhaar-based OTP

The Walmart-owned firm said this will now enable several millions of Indians to become a part of the UPI ecosystem seamlessly

Walmart-owned payments firm PhonePe said that it has enabled unified payments interface (UPI ) activation using Aadhaar-based OTP (one-time password) authentication. PhonePe said it is the first UPI TPAP (third-party application providers) App to roll out the Aadhaar-based UPI onboarding flow that will now enable several crore Indians to become a part of the UPI ecosystem, seamlessly and securely for the first time. TPAP is a service provider to the PSP (payment service provider) and participates in UPI.

“We are excited to be the first fintech platform to offer Aadhaar-based authentication for our users,” said Deep Agrawal, Head of Payments at PhonePe. “Going forward, we are closely working with NPCI (National Payments Corporation of India) to take UPI international.’’  

Under the previous UPI onboarding flow, a valid debit card was mandatory to set up a user’s UPI PIN during the UPI registration process. This restricted access for a large number of Indian bank account holders who didn’t have a debit card handy. The addition of Aadhaar onboarding for UPI will do away with this restriction. It would allow previously under-served populations to experience the convenience and benefits of digital payments.

In the new flow, the Aadhaar e-KYC flow will be made part of the UPI onboarding journey on the PhonePe App. Users choosing this option will only need to enter the last 6 digits of their Aadhaar number to initiate the onboarding process. They will then receive an OTP from UIDAI  (Unique Identification Authority of India) and their respective bank to complete the authentication process. Post this, customers will be able to access all UPI features such as payments and balance check on the PhonePe App.