PhonePe now allows customers to withdraw cash using UPI1 min read . Updated: 22 Jan 2020, 06:07 PM IST
- The feature went live on the platform on Tuesday
- Any merchant can sign up to be an ATM on PhonePe, using the company’s PhonePe for Business app
NEW DELHI : You can now use the government’s Unified Payments Interface (UPI) to convert money in your account to cash. UPI-based payments platform, PhonePe, has announced a new PhonePe ATM feature, which allows customers to send money to a merchant using PhonePe and take cash from them for the same amount.
The feature went live on the platform yesterday. According to PhonePe, over 75000 merchants have signed up for the service in Delhi/NCR at the moment. The service is live only in the National Capital Region right now, but the company says it plans to scale it up based on customer response from this pilot process.
Any merchant can sign up to be an ATM on PhonePe, using the company’s PhonePe for Business app. The platform also lets them enable or disable the service at will, allowing them to ensure they have enough cash flow. However, consumers can only withdraw Rs. 1000 per day using this service.
While the feature allows only small withdrawals at the moment, using UPI to convert money into cash is not unheard of in India. Many e-commerce platforms use UPI as an accepted mode of payment under their cash on delivery feature, while couriers often tell customers to make payments through apps like Google Pay, PhonePe etc. instead of handing over cash for deliveries.
India also lacks sufficient number of ATMs for banking customers. According to the International Monetary Fund, India has the fewest ATMs per 100,000 people among BRICS countries, while data from Reserve Bank of India in May last year showed that the number of ATMs in the country fell over the past two years.
If services like PhonePe ATM are successful, it could spur these apps to increase the withdrawal limits and transactions. The company isn’t the first platform to have tried this either. Godfrey Phillips-owned convenience store chain, 24Seven, had started advertising a similar ATM service in some of its outlets.
According to store personnel at such outlets, the service would allow customers to swipe their cards at the point of sale (POS) machines and take cash from the stores.
Financial services company, Razorpay, recently found that UPI transactions in India grew by 442% year-on-year in 2019. PhonePe itself claims it has approximately 540 million monthly transactions and over 175 million users.