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Informist, Monday, Jan. 20, 2025

 

--HC sends On4Off Trading, NPCI to mediation in credit card-UPI pay case 

--CONTEXT:On4Off sought to bar NPCI from using UPI pay method via credit card 

 

NEW DELHI – The Delhi High Court on Monday sought to resolve a dispute between On4Off Trading Pvt. Ltd. and the National Payments Corp. of India and other parties, over the latter using the former's patented technology process for aggregating Unified Payments Interface payments using credit cards, through mediation. On4Off Trading, which had filed a permanent injunction suit against NPCI and others, also sought compensatory damages for infringing on its patent process. 

 

"Plaintiff says he is willing to take the possibility of pre-instituted mediation. In view of the aforesaid, it is deemed appropriate parties are referred to mediation," the court said. It appointed Justice A.K. Sikri as the mediator between the parties. The court will next hear the case on Mar. 11.

 

On4Off Trading said one of its directors, along with his two children, had patented the process which allows one to make a monetary transaction from a credit card after scanning a UPI Quick Response code. They invented a method and system that facilitates payments through various financial instruments after scanning the UPI code, the company said.

 

The petitioner said the then Reserve Bank of India governor Shaktikanta Das had issued a statement which said that the central bank was planning to allow linking RuPay credit cards with UPI. In 2022, the RBI issued a circular thereby allowing UPI transactions using RuPay credit cards.

 

Earlier, UPI transactions were only allowed through debit cards, said the petitioner. However, through the circular, a transaction can be facilitated using only RuPay credit cards after scanning a UPI QR code, said the petitioner. NPCI was using the patented process, which was assigned to the petitioner, without any licence or permission from them, said On4Off Trading. 

 

By facilitating transactions through RuPay credit cards with UPI QR codes, NPCI has internalised the entire process developed by the inventor, in as much as both the RuPay and the UPI are the products of NPCI, said the petitioner. Allowing linkage of only RuPay credit cards with UPI is a business strategy implemented by NPCI to leverage illegal benefits from the unauthorised use of the patented process, said the petitioner.

 

It was also affecting the market of other card manufacturers, who have been authorised to sell their credit cards in India, said the petitioner. "As per the data published also available on the website of Defendant No. 1 (NPCI) in the month of October 2023 total transaction of Rupees 100 Crores (INR 1 billion) have been facilitated through RuPay Credit Cards on UPI QR Code and during the weekends the figure reached up to Rupees 150-200 Crores (INR 1.5 billion to INR 2 billion)," said the petitioner. Other defendants in the case are the third-party application providers and banking institutions which help in facilitating the process patented by the plaintiff and are gaining illegal benefits through the unauthorised use of this process, said the petitioner.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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