Country's largest fintech firm PhonePe on Friday said it has exited from account aggregation business as it could not add enough partners to provide services as per its expectation. The company said that it has decided to surrender NBFC-AA licence to the RBI, and initiated the wind down of AA operations -- which allowed the company to obtain financial information of users with their consent and share it with banking and financial institutions for offering financial services such as loan, credit card etc.
"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," PhonePe said.
The Walmart group firm had received AA license 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 said.
The company said that it will reach out to its AA user base shortly to inform them about the decision, and help them as per regulatory guidelines.
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