Device maker Xiaomi has entered the crowded digital payments space in the country by partnering with ICICI Bank and PayU India. The Mi Pay service, which is open to Xiaomi users, is similar to Google Pay’s model but supports UPI-based payments as well as debit and credit cards.
On Wednesday, the company announced that it had received approval from the National Payments Council of India (NPCI) for large group usage and has rolled out the beta version for its users.
With this move Xiaomi will be taking on Amazon Pay, Google Pay, which launched in 2017, and WhatsApp Pay, the launch of which has been stalled as NPCI seeks clarity on data localisation of users on the platform. The platform will also take on digital wallet players like Paytm, MobiKwik, PhonePe who have been using customer loyalty as a hook to cross-sell other financial products, wealth management and insurance.
The launch of Mi Pay is part of the device maker’s plan to create an ecosystem around its products, including Mi Credit launched in May, the MIUI browser, Mi Cloud services, Mi Music, Mi Videos and connected devices, among others. This is similar to Apple’s strategy for its ecosystem users.
Mi Pay will allow users to pay via Bharat QR code and the Unified Payments Interface, different from its NFC-based payment system in China, where the company is headquartered.
The announcement also comes ahead of its competitor ByteDance, which plans to launch a payments service in China.
Some digital lenders and wallet companies have their business slowdown owing to the Supreme Court ruling to strike down the use of Aadhaar-based eKYC to onboard customers in September. The Reserve Bank of India made it mandatory to complete eKYC of all customers on these wallet platforms. NPCI recently struck down the eNACH mandate for payment of equated monthly instalments to lenders which runs on the Aadhaar stack in compliance with the Supreme Court’s September order.
With the payments and lending landscape fraught with regulatory hurdles, Xiaomi’s strategy to rely on partners to onboard and lend on their books can be a safe play, it will be dependent on how many of its users in India are willing to log on to the platform.