PhonePe Enables UPI Based IPO Biddings
On Tuesday, the digital payments player PhonePe has announced a new service for the customers. That enables users to participate in an IPO by using their BHIM UIP system created on the PhonePe App. In early, the National Corporation of India (NCPI) has introduced a UPI based IPO application which is the mandate for retail investors. At present, PhonePe enables UPI based IPO biddings.
PhonePe becomes the first non-banking app to facilitate such transactions with UPI. Before this, the market regulator Sebi and NCPI allowed retail investors to make bids through UPI. But, only banks were given the mandate to promote these transactions.
According to the reports, before introducing the UPI system investors had submitted their bank details long with IFS code to participate in an Initial public offering. Now, UPI based payments make the process easy. By using UPI based payments, investors should only submit their UPI ID to block the funds. Head of payments, banking, and financial services, PhonePe stated that UPI becomes the best and easy method to make IPO bids.
In August, in a total of 918 million transactions, more than 400 million users made transactions via UPI. A source said that about 90 percent of transactions made by Paytm, Google Pay and PhonePe.
UPI Payment Method (Phonepe Enables UPI Based IPO Biddings)
As of the source, investors who want to participate in IPO will have to fill the bid details in their IPO application form along with UPI ID which linked with their bank account. The Bank will send a request to the investor mobile number linked to UPI ID for blocking the funds in case of allotment.
Earlier, the IPO bidding process will take up to 6 days for completion. But they are working on this process to bring it down to three days or even lower in the future, said by one of UPI Officials.
In the last fiscal, NCPI had launched UPI 2.0 which is an upgraded version of UPI that allowed customers to block funds for future transactions. It acts as a substitute for the existing ASBA process through which investors earlier blocked their funds.
The unique method of UPI payments of IPO has made it easier for retail investors by increasing efficiency. It also eliminates the need for manual intervention and logistics at various stages. NPCI chief said that they are looking forward to a similar combination in the future, intending to make the process completely digitized.