US-based hired cab service Uber has partnered with Paytm to comply with Reserve Bank of India regulations for credit card payments in India. Uber India had been allowing credit card payments without the mandatory two-factor authentication in India before the partnership with Paytm.
Uber announced the move in a blog post on Thursday. The post read, "Today, we're excited to announce that you can now pay for Uber rides with your debit card, net banking or credit card... Once you link your debit card or bank account via a Paytm wallet to your Uber account, you'll easily be able to top up your wallet using multiple payment options."
According to Uber, the Paytm wallet option is available on Android and iOS only as of now. Users will have to top up their Paytm wallet and the fare will be automatically deducted from the wallet. Users will have to link their Paytm account to the Uber app or create a new Paytm account to continue using the cab service in India.
Uber doesn't appear to have a similar partnership in any of the other countries it operates in. Competing cab services such as Ola and Meru have their own digital wallets. While Ola and Meru also accept payment by cash, Uber does not.
RBI had earlier announced that all transactions involving domestic credit cards must follow rules requiring two-step verification. Uber had been using an overseas payment system that allowed it to bypass two-factor authentication.
Cashless payment, in spite of its convenience, isn't widespread in India. Paying by cash has its problems, but we feel that cashless transactions could add a new set of headaches for users. Restaurant discovery service Zomato is also planning to add cashless transactions to its apps.