UPI emerges as top pick for Bitcoin exchanges in India2 min read . Updated: 16 Mar 2018, 04:45 AM IST
Though the bitcoin exchanges, such as Zebpay and Unocoin, have NEFT, RTGS and IMPS, they expect UPI to soar for cryptocurrency transactions
Mumbai The increasing popularity of Unified Payments Interface (UPI) has prompted bitcoin exchanges to adopt and promote this payment option for buying and selling cryptocurrencies.
Bitcoin exchange Zebpay Thursday informed its customers in an email that the UPI option is now open on its platform. “We have now started INR deposits via UPI. You can send money to our registered banks using any of the UPI supported apps like BHIM, GoogleTez, PayTM and PhonePe," the email said.
Though UPI was always available, it wasn’t promoted on bitcoin exchanges on the assumption that it wouldn’t pick up. “We didn’t really think that UPI would become big... We didn’t promote NEFT and similarly, we didn’t promote UPI. UPI is an option provided by default by your bank or the UPI-enabled app. Whether it is Paytm or GoogleTez, it provides the UPI outgoing transaction option and, hence, you can send it to any bank account and buy anything you want," said Sathvik Vishwanath, chief executive and co-founder, Unocoin, a cryptocurrency exchange.
Another cryptocurrency exchange Zebpay has a similar story to tell. “Earlier, we were having some issues around the (UPI) functionalities; so it never showed as a payment option on the app. Now, we have the functionality to identify which customer comes from where. In our system, you will see it under IMPS. It can work with all bank apps that are UPI-enabled," said Nischint Sanghavi, head of exchange at Zebpay, a cryptocurrency exchange.
Though the exchanges have payment gateways, national electronic funds transfer (NEFT) and real time gross settlement (RTGS) options, they expect UPI to soar. “UPI is actually one of the most favoured methods of deposits on our platform as it is seamless. Since it is tied up with bank account and mobile number, and all crypto asset exchanges want deposits to come from linked bank accounts, it works for us. UPI is also a free method of deposit since there is no inherent charge for making a deposit. In all senses, it is convenient for the consumers considering both bitcoin exchange and UPI are mostly mobile only," said Rahul Raj, co-founder of Koinex, which opened the UPI option about a month ago.
The increased interest in UPI comes at a time when major banks including Citibank and HDFC Bank Ltd have prohibited use of debit, credit and prepaid cards for cryptocurrency transactions.
“Some people were using credit and debit cards to buy bitcoin, and Ethereum internationally using credit card and debit cards. Now, that has been stopped. The move affects only the customers who are trying to buy from exchanges abroad through credit card and debit cards," said Vishwanath.
Currently, what payment options are available to buy bitcoins? “For a lot of us, NEFT, RTGS and IMPS work fine. It depends on the bank of the customer. Bitcoin exchanges can get money from all bank accounts," said Vishwanath.
In January, major banks including HDFC Bank Ltd and ICICI Bank Ltd suspended current accounts of bitcoin exchanges. Since then, bitcoin exchanges have opened accounts with smaller banks such as Bandhan Bank Ltd and RBL Bank Ltd to accept deposits.
Coinsecure said that due to some problems in its HDFC Bank account, it has permanently removed it permanently, and asked customers to deposit money in their current account held with RBL Bank and Bandhan Bank.