PhonePe Group Withdraws from Account Aggregator Sector, Plans to Collaborate with Other AAs for Financial Inclusion
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Synopsis
On February 7, 2023, PhonePe Group declared its exit from the Account Aggregator business, opting instead to form partnerships with other AAs. This move aims to further financial inclusion across India as the company transitions its focus.
Key Takeaways
- PhonePe Group is exiting the Account Aggregator business.
- The company will partner with other AAs to enhance financial inclusion.
- They registered nearly 5 crore users on their AA platform.
- PhonePe will surrender its NBFC-AA license to the RBI.
- Financial inclusion is a priority for PhonePe as India's economy develops.
New Delhi, Feb 7 (NationPress) Fintech giant PhonePe Group announced on Friday its decision to withdraw from the Account Aggregator (AA) sector, stating that it will collaborate with other AAs in the marketplace instead.
As one of India's foremost fintech companies, PhonePe Group emphasized its commitment to developing products aimed at enhancing financial inclusion for all Indians, a crucial step towards the nation's goal of becoming a developed economy by 2047.
“We firmly believe that expanding the Account Aggregator (AA) ecosystem is essential for effectively tackling financial inclusion. By 2022, the AA ecosystem was still in its infancy, and early adoption rates were quite low,” the company mentioned in a statement.
In June 2023, PhonePe Group obtained its own AA license, aspiring to create “our own Account Aggregator platform and accelerate the growth of the AA ecosystem.”
“This marked a shift from our typical approach of focusing solely on end consumer (B2C) products. We are proud to have registered nearly 5 crore Indians on our AA platform in under two years,” the company stated.
However, due to conflicting priorities, “we have not been able to onboard as many financial information providers (FIPs) to our platform as we had hoped.”
“The encouraging news is that the AA ecosystem is thriving today, with many players experiencing remarkable growth. Consequently, PhonePe Group has decided to exit the Account Aggregator business and will instead partner with other AAs in the market,” it reported.
As a result, the company will surrender its NBFC-AA license to the Reserve Bank of India (RBI) and commence the winding down of its AA operations.
“We will soon reach out to our AA user base to inform them of our decision and assist them according to regulatory guidelines,” stated PhonePe Group.
