India's Unified Payments Interface (UPI) will soon find another international backer. Netflix plans to roll out support for UPI payments in the country, a source familiar with the matter told Gadgets 360.
The on-demand streaming service will introduce the new payment option after the rollout of UPI 2.0, the source said, requesting anonymity. UPI 2.0, expected to roll out later this year, is the upgraded version of UPI protocol which will offer a range of new capabilities, including programmable electronic mandates that can enable auto-renewable billing option.
Earlier this year, Netflix had held advance talks with One97 Communications for introducing support for recurring billing option with mobile wallet Paytm, three sources told Gadgets 360. But in the past three months, those talks have hit a wall, a source said. Music service Gaana accepts Paytm as an option, but it requires users to punch in their credit/ debit card number for approval. Netflix couldn't get over this limitation.
"We already have credit card billing so introducing a wallet provider as a middleman makes no sense," the source told Gadgets 360 recently. There was one more limitation that emerged as a deal breaker. "On top of that, Paytm money cannot be used to pay cross-border," the source told Gadgets 360. Netflix had internally built the tech back-end and user interface and design flows for Paytm payments option, but then it put it in "cold storage," the person said. A Netflix spokesperson declined to comment, as did Paytm's.
At a point, Netflix also considered opening its own "accounting and legal liabilities if we use our Mumbai subsidiary to accept subscription payments," the source said. "While that's not too difficult to work around, I don't think it's worth it. Paytm is simply not worth hiring more accountants in India."
The move would help Netflix extend its reach in India. At present, the company only supports credit cards -- and select debit cards with international purchases enabled -- for payments. Penetration of both remains low in the country.
The arrival of Netflix will lend further credibility to UPI, which in the recent months has attracted several international players. Earlier this week, Uber introduced support for UPI payments on its platform. Facebook, Amazon, and Google have also been working with NPCI to introduce UPI-based payments solutions in their apps, multiple people familiar with the matter said.
And many more Indian and international companies may jump ship too. At present, several services rely on wallet apps to allow their customers to make payments seamlessly, without resorting to passwords and OTPs associated with card usage in India. They will soon have little reason to not support UPI on their platforms.
Introduced just last year, UPI is already raking in big numbers. Even as the volume of transactions via UPI-powered apps is much lower than that of Prepaid Instrument (PPI; mostly wallet apps), it is already being used to exchange more money. According to figure provided by RBI for the month of July, UPI-powered apps were used to do 11.4 million transactions and exchange Rs. 33.8 billion. In comparison, PPI had seen 88.7 million transactions, but only Rs. 25.1 billion changed hands.
Disclosure: Paytm's parent company One97 is an investor in NDTV's Gadgets 360.