UPI-Credit Card Payment Dispute: On4Off, NPCI To Mediate On Differences
On4Off has accused NPCI of unauthorised use of its patented technology, alleging Rs100 crore in RuPay credit card transactions via UPI QR codes in October 2023 alone.
The Delhi High Court on Monday referred On4Off Trading Pvt. Ltd. and National Payments Corporation and thirteen others to mediation on Monday. The dispute initiated by On4Off seeks to bar others from using the UPI Pay method through credit cards. This will be a pre-litigation mediation.
The single-judge bench of Justice Amit Bansal appointed former Supreme Court Judge AK Sikri as the mediator.
NPCI provides for linking a user’s Rupay credit card to their UPI account to make transactions.
On4Off has asked the high court to stop NPCI and others from using the UPI Pay method through credit cards as immediate relief and a permanent one. The company submitted that it developed this technology in 2017 and filed for a patent on Jan. 16, 2022.
The patent application for the technology was first published on April 8, 2022 and it worked its way through the examination channel of the Indian Patent Office, according to the information given in the petition copy seen by NDTV Profit.
The patent office then came out with issues about the lack of inventive steps in the claim.
However, as per the filing copy, On4Off responded to these objections in Nov. 2022, maintaining that the patented process allows interoperability between credit card payment rails and dynamic UPI QR codes and hence was different from existing technologies.
Details of Alleged Infringement
Back in the year 2022, the Reserve Bank of India proposed to link RuPay credit cards with UPI. The proposal was then backed by a circular on Oct. 4, 2022, and such transactions were finally allowed.
Now it is the case of On4Off, represented by AK & Partners, that NPCI has been using the technology that enables such transactions without any right or authorisation. The national body enabled transactions between RuPay credit cards and UPI QR codes, the petitioner has alleged.
It is further alleged that NPCI has internalised the patented process, using it for RuPay credit card transactions to the exclusion of other card networks. The plaintiff argued that this not only violates its patent rights but also distorts the market by adversely affecting other card manufacturers.
According to On4Off, transactions worth Rs100 crore were facilitated using RuPay credit cards on UPI QR codes in October 2023 alone.
On4Off has also accused third-party application providers and banking institutions of facilitating the patented process without authorisation, thereby gaining illegal benefits.
These third-party application providers include Paytm Payments Bank, Google India Digital Services Private Limited (Google Pay), PhonePe Private Limited, Punjab National Bank (Bharat Interface for Money), ICICI Bank (iMobile Pay), YES Bank (Yes Pay Next), Freecharge (acquired by Axis Bank), Canara Bank (Canara AI1), Amazon.com, Inc. (Amazon Pay), Fino Payments Bank, Gokiwi Private Limited, Samsung India Electronics Pvt Ltd (Samsung Wallet), and Shriram Finance Limited.
