PhonePe exits account aggregation business, surrenders NBFC-AA licence to RBI
Bengaluru: PhonePe, India's largest fintech firm, announced on Friday its exit from the account aggregation (AA) business, citing challenges in onboarding enough partners to meet its expectations, media reports said.
As a result, the company has decided to surrender its NBFC-AA licence to the Reserve Bank of India (RBI) and has begun winding down its AA operations, reported PTI.
The platform enabled PhonePe to access users’ financial information with their consent and share it with banks and financial institutions for services like loans and credit cards.
"We feel proud that we have managed to register nearly 5 crore Indians onto our AA platform in less than two years. However, due to competing priorities, we have not been able to onboard as many financial information providers to our platform as we would have liked...Therefore, PhonePe Group has decided to exit the Account Aggregator business, and instead we will partner with other AAs in the market," the company said, according to the report.
The Walmart-backed firm had secured its AA licence in June 2023.
"We strongly believe that growing the Account Aggregator ecosystem is very important to addressing financial inclusion properly. By 2022, the AA ecosystem was still very nascent and early adoption numbers were still low.
"So, in June 2023 we got our own AA license in a bid to build our own Account Aggregator platform and help accelerate the AA ecosystem's growth. This was a departure from our usual strategy of building only end consumer products," PhonePe stated, reported PTI.
The company added that it would soon reach out to its AA users to inform them of the decision and assist them in accordance with regulatory guidelines.
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