A day after asking ICICI Bank Ltd to give access to Flipkart’s e-wallet PhonePe, the National Payment Corporation of India (NPCI) did a volte-face on Friday and said it is Flipkart’s e-wallet that is in contravention of the interoperability norms under the Unified Payments Interface (UPI).

NPCI also asked Flipkart to allow payments from UPI handles of all banks on their apps. “During a review of ICICI Bank blocking the UPI transactions made through Flipkart’s PhonePe, we have found the said e-wallet and the Flipkart Apps are in contravention of the UPI guidelines of interoperability. Hence, we have directed PhonePe and Flipkart to comply with the UPI guidelines and allow payments from UPI handles of all banks on their apps," NPCI said in a statement on Friday evening.

It said ICICI Bank has been told to allow UPI transactions from PhonePe app as soon as PhonePe and Flipkart start complying with UPI norms on interoperability. It can be noted that after being asked by NPCI to allow Flipkart transactions, ICICI Bank on Thursday told NPCI to instead make the leading e-commerce firm and its channel partner Yes Bank, which runs the PhonePe app, comply with the interoperability norms and end “restrictive trade practices".

The one-oneupmanship between the largest private sector lender and the top e-commerce player reached flashpoint earlier this week when the bank blocked the payments through PhonePe. This forced Flipkart to move NPCI, the custodian of the UPI platform.

Through a public statement on Thursday, it asked ICICI Bank to end the blockade forthwith.

“Based on a review by NPCI on ICICI Banks’s action to block UPI transactions made through PhonePe App, we would like to state that ICICI Bank has been advised to open UPI transactions immediately," an NPCI statement said on Thursday.

Countering this, ICICI Bank accused PhonePe of following a “restrictive practice" of allowing only users of its own UPI handle to make payments on its app which is a violation of the UPI guidelines on interoperability.

“NPCI has assured us in writing that this will get corrected very soon and the app concerned will allow interoperability. As soon as this is corrected, we will start allowing UPI transactions to resume on this app," the bank said in a statement on Thursday night.

NPCI said it had discussions with both ICICI Bank and Yes Bank before arriving at the decision. “We have also advised banks to adhere to the merchant on-boarding guidelines meticulously from the angle of interoperability of merchant app so that such disputes are avoided," NPCI had said.

Early this week, ICICI Bank had blocked its customers from transacting on PhonePe, citing security concerns.

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