MUMBAI: In a sign of the growing turf war between banks and new economy fintech companies, India’s largest private sector lender ICICI Bank has blocked payments by its customers on Flipkart’s wallet and payments app PhonePe , citing “restrictive practices” and security concerns over data. The move comes after the country’s largest lender, SBI , barred top ups through net banking and cards on mobile wallets last year, citing security issues.PhonePe has partnered with Yes Bank for UPI ( Unified Payment Interface ) transactions, since currently only banks are allowed access to the UPI payment system. However, according to UPI guidelines, any bank customer can use any banks’ UPI app for payments. ICICI Bank customers have not been able to make UPI-based transactions on PhonePe since Friday. “Some banks, including us, have raised security-related concerns at appropriate forums about the access to UPI data to a non-banking application.Further, this entity is following restrictive practices allowing users to make payments with only its UPI handle, which is in contravention to the UPI guidelines of interoperability and choice that empowers a customer to choose any app to make payments through UPI,” said an ICICI Bank spokesperson in an emailed statement to ET’s queries. “Pending resolution of these concerns, we have temporarily declined to undertake UPI transactions originating from this entity,” the spokesperson added.ICICI Bank’s move was flagged on Twitter by PhonePe’s CEO Sameer Nigam, adding that “such unilateral actions will hinder UPI adoption.” He added that PhonePe had not received an official communication from ICICI Bank on the reasons for the move, and declined to comment further when contacted by ET Payment company executives ET spoke to said on the condition of anonymity that UPI was expected to be a shot in the arm of banks which were losing a large chunk of their retail payments pie to mobile wallets. Hence, they were betting big on the fact that wallets cannot access UPI-based payments.However, with payment applications like Trupay and PhonePe using banks’ APIs (Application Programming Interface) to access UPIbased payments bankers feel that they could be losing out to wallets again. Sources have told ET that more than 6,000 transactions originating from PhonePe which uses the Yes Bank handle has been blocked by ICICI Bank since Friday resulting in widespread complaints being raised on social media The move comes as banks are looking to promote adoption of their mobile applications through merchant tie-ups and QR code-based payments as aggressive growth in customer base of these third party applications threatens their business models. Even ICICI Bank is in the process of rolling out EasyPay for small merchants to allow digital transactions over the counter through QR code, UPI and others instead of using bulky PoS (point-of-sale) terminals.Simultaneously, even State Bank of India is onboarding merchants on its SBI Buddy platform. The ICICI Bank statement added that it was the “first few banks to introduce UPI through its mobile banking apps”. ICICI Bank’s wallet and UPI-based payments platform Pockets, first launched in February 2015, has exceeded just 5 million downloads on Google Play Store . Compared to Pockets, PhonePe crossed 10 million downloads in just six months of its launch.