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UPI Autopay goes mainstream; govt stands firm on traceability | #socialmedia | #education | #technology | #infosec


You can now set up automatic monthly payments for your Netflix or Hotstar subscription without a debit or credit card, thanks to UPI. The feature, which was launched more than a year ago, is finally being adopted by large merchants and the most popular UPI apps. It’s a potential game-changer in a country like India, where only a tiny percentage of people use plastic money.

Also in this letter:

  • Government isn’t budging on traceability rule
  • Addition invests $76 million in Delhivery
  • Kerala HC tells govt to tweak CoWin platform

UPI Autopay picks up pace after a quiet first year

Automatic, recurring payments through UPI, launched last year by the National Payments Corporation of India (NPCI), had a slow start but are now picking up speed.

What’s happening? Top merchants such as Netflix and Hotstar now let users set up recurring payments through UPI.

  • At least 100 other online merchants in categories such as streaming, financial services, wealth management, news media and education are in various stages of testing the feature before rolling it out, sources told us.
  • Many apps that facilitate UPI payments, such as PhonePe and Google Pay, are also in various stages testing and rolling out the feature.

What it is: Autopay allows users to make recurring transactions of less than Rs 5,000 using UPI and can be used for everything from repaying loans, to paying rent, school fees and for subscriptions. Most recurring payments currently take place through credit or debit card-based mandates, for which settlement is more expensive.

Why it matters: UPI Autopay is expected to be a gamechanger for small businesses that collect monthly fees, as it allows them to have a customisable debit agreement with customers through one-time consent, without the need for a debit or credit card.

Why now? Experts told us the sudden increase in interest around UPI Autopay coincides with new RBI rules that will make recurring payments through debit and credit cards more cumbersome. Under the new rules, which will come into effect next month, banks must send pre-transaction and post-transaction notifications to customers, and the pre-transaction notification should allow the customer to withdraw consent. The RBI extended the deadline to implement this from April to October after banks said they needed more time.

Slow start: While UPI Autopay was launched in July 2020, only the UPI apps of banks such as SBI, HDFC Bank, ICICI Bank and Paytm Payments Bank were processing such transactions. India’s leading UPI app PhonePe only introduced the feature this June, while Google Pay is yet to do so.

Last month, State Bank of India, Paytm Payments Bank and Bank of Baroda were the three top banks on UPI Autopay, having registered 660,000, 204,000 and 186,000 mandates, respectively, according to NPCI.


Government sticks to its guns on traceability

The union government is standing firm on the traceability issue, saying social media platforms such as WhatsApp must reengineer their platforms if needed to help law enforcement agencies trace the ‘originator’ of any message the government deems problematic, official sources told us.

Catch up quick: Traceability is one of the requirements under India’s new IT rules, which came into effect on May 25. That very day, WhatsApp sued the government in the Delhi High Court on this issue.

Govt won’t budge: But at a recent meeting with social media platforms, the Ministry of Electronics and IT stood its ground. It argued that “traceability has nothing to do with breaking end-to-end encryption”, that it is “very much possible”, and that it is an “absolute necessity” for national security and law and order.

  • “Our mandate is user safety and a safe and trusted Internet. If that is the objective, how can traceability not be part of our toolkit,” a top government official told us.

The move comes after a change of guard at the ministry, with Ashwini Vaishnaw taking over as union minister for electronics and IT and Rajeev Chandrasekhar as the junior minister. Chandrasekhar has held a series of meetings with executives of top technology and Internet firms in the past few weeks.

The ministry has been involved in face-offs with various platforms, especially Twitter and WhatsApp, over the IT rules. WhatsApp maintains that traceability requirement would force them to break the end-to-end encryption and thus compromise the privacy of their users.

What’s the rule? The traceability rule requires significant social media intermediaries to be able to trace the first originator of a particular message. It applies to platforms such as Facebook, Twitter, Instagram, Signal, WhatsApp and Telegram.

WhatsApp’s stand: WhatsApp wrote on its blog that it launched end-to-end encryption in 2016 “so that calls, messages, photos, videos, and voice notes to friends and family are only shared with the intended recipient and no one else (not even us).”

“Traceability is intended to do the opposite by requiring private messaging services like WhatsApp to keep track of who-said-what and who-shared-what for billions of messages sent every day. Traceability requires messaging services to store information that can be used to ascertain the content of people’s messages, thereby breaking the very guarantees that end-to-end encryption provides. In order to trace even one message, services would have to trace every message,” it added.

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Lee Fixel’s Addition invests $76 million in Delhivery

Lee Fixel, who fueled the first boom in the Indian consumer Internet ecosystem with investments in startups like Flipkart and Ola, has picked up more shares in one of his early bets — Delhivery.

The former partner at New York-based investment firm Tiger Global has put more than $76 million in IPO-bound Delhivery through his new fund, Addition.

We reported in June, citing Delhivery cofounder Sahil Barua, that the Gurugram-based startup was aiming to list here by the end of this financial year to raise around $500 million.

For Addition, this is the second investment in India, after it backed InShorts’ location-based social networking platform Public last year. Fixel has raised $1.2 billion in his first fund under Addition.

In July, Delhivery had raised a $100 million of strategic capital from FedEx Express, a subsidiary of global logistics major FedEx Corp. Before that in May, it closed a $277 million funding round led by US-based Fidelity with Singapore’s sovereign wealth fund GIC also participating in the round among other investors. It was valued at $3 billion after the Fidelity-led funding round.

Also Read: ETtech IPO Watch: A decade of Delhivery

In other deal news….

ShopUp, a business-to-business commerce startup in Bangladesh which merged with India’s fashion focused etailer Voonik in 2020, has raised $75 million in a new round of funding led by Peter Thiel’s Valar Ventures, with participation from Prosus Ventures – the venture arm of Prosus. This is the first investment by Valar Ventures and Prosus Ventures in Bangladesh.

Dukaan, an online retail platform that helps businesses go digital, has raised $11 million in a funding round led by 640 Oxford Ventures at a valuation of $71 million. The money will be used to expand operations, hire web designers and developers, and establish key strategic partnerships to grow the paying merchant base.

Biddano, a healthcare supply chain platform, has raised $2 million in a funding round led by Gokul Rajaram, a board member at Coinbase and Pinterest. The Pune-based startup will use the money for product development and engineering, and to build its go-to-market teams.


ETtech Catalyst: How to win new categories in the multi-trillion-dollar SaaS market

Krishna Depura (right) and Sumer Juneja

Software as a Service, often shortened to SaaS, is the industry of cloud-hosted software businesses that charge their customers a recurring, usually monthly or annual, subscription fee.

The broader SaaS market and the successful companies in it have been hot topics in technology publications for a while now. But one specific question, responsible for ~50% of the total market cap of SaaS companies, is yet to garner much media coverage. It is: how can someone approach creating a SaaS category, i.e., a new class of SaaS software that doesn’t yet have any directly comparable products in the market?

As cofounder and investor of MindTickle, a SaaS platform that’s the global leader of a rapidly emerging category called sales readiness, here’s a summary of our top 5 learnings on SaaS category creation from our journey.

Identifying a category creation opportunity: As technologies are adopted more and more across our personal and professional lives, it’s only natural that many new SaaS categories will be created in the next few years. But how does one identify a specific opportunity among these?

Targeting the right market: If you are selling something that has never been sold before, you already have a tough adoption battle ahead. To make it slightly easier, identify an early adopter group willing to try out new software products even before they are truly finished.

Evangelising the category: When you try to create a new software category, it’s imperative to create awareness in the overall market, even among the potential buyers and other stakeholders who might not become your customers immediately. Many SaaS pioneers have done “category evangelisation” incredibly well, such as Salesforce, Hubspot and Gainsight.

Making buyers successful: It’s often said that enterprise software products are in the business of making their buyers successful. This saying is perhaps even more true for new categories. If your buyers and users are sticking their necks out to get through the internal approval processes and secure budgets to adopt your unheard-of software, you owe it to them to make them successful. Also, when they become successful, they’ll tell their friends and peers about you, generating invaluable word-of-mouth marketing.

Being in it for the long haul: When done right, the creators of new SaaS categories reap huge rewards and become massively successful. However, the category creators often take a significant period to reach the critical mass of awareness and adoption. For reference, the largest 10 SaaS category creators to go public after 2015 took 13 years on average (median) to achieve this feat.

Krishna Depura is cofounder and CEO of MindTickle. Sumer Juneja, a partner at SoftBank Investment Advisers, is a board member and investor at MindTickle.

Click here to read the full version.


Binance restricts services in Singapore after warning

Cryptocurrency exchange Binance said it will restrict its payment services in Singapore from September 10 and the app will be removed from the Apple’s App Store and Google’s Play Store in the country.

Why? The city state’s central bank became the latest regulator to take aim at Binance, warning last week that its global platform, Binance.com, could be breaking the law by providing payment services to Singapore residents without an appropriate licence.

The restrictions only apply to Binance’s global platform and not its Singapore platform, which Changpeng Zhao, the company’s chief executive, has urged users to switch to.

Trouble with regulators:

  • In late June, Binance was barred from conducting “regulated activities” in the UK by the country’s financial regulator. Around the same time, Japan’s financial markets regulator, issued a warning against Binance, saying the cryptocurrency exchange continues to offer services in the country without authorisation.
  • Germany’s watchdog said in April that Binance risked being fined for offering tokens connected to stocks. In May, Bloomberg reported the exchange was under investigation by the US Justice Department and Internal Revenue Service.

In July, Zhao wrote in a blog post that the company was ramping up its compliance team and partnerships, and localising operations to adhere to local regulations.


Kerala High Court tells govt to tweak CoWin, allow shorter gap between jabs

The Kerala High Court has directed the union government to tweak the CoWin website and app to allow people to schedule their second dose after four weeks of receiving their first. Currently, users can schedule to receive their second jab only 84 days after the first.

What the court said: Justice P B Suresh Kumar said that if the central and state governments could permit a shorter gap between jabs to those traveling abroad, there was no reason why this couldn’t be extended to those who need to be fully vaccinated for their employment or education.

The government had earlier opposed the idea, saying the 84-day gap between two doses of Covishield was mandated to increase the vaccine’s efficacy.


Other Top Stories We Are Covering

Auto companies in India are chasing tech talent: Leading vehicle makers have been hiring tech talent like never before as they have set off on a massive digitisation drive to boost virtual sales and smoothen glitches in supply chain, procurement and manufacturing functions amid the pandemic.

Tredence partners with Databricks: Tredence Inc. has tied up with Databricks to build an On-Shelf Availability Solution (OSA) for retailers. The accelerator will help retailers and manufacturers solve out-of-stocks by combining Databricks’ data processing capabilities and Tredence’s expertise in AI/ML.


Global Picks We Are Reading

  • Texas city to offer Samsung large property tax breaks to build $17 billion chip plant (Reuters)
  • China says government to set prices for after-school classes (Bloomberg)
  • Tech giants are rushing to develop their own chips – here’s why (CNBC)



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