Ola launches UPI plugin to allow customers to pay directly to drivers from the app

Bengaluru-based ride hailing giant Ola Cabs, which battles with Uber and Rapido, is introducing a significant update to its payment system.

The company is rolling out a new feature that will enable its customers to make direct UPI payments to drivers through the Ola app.

The feature will be initally launched in Bengaluru by the end of this week and expected to be available nationwide by December's end, according to founder & CEO Bhavish Aggarwal.

Bhavish said the new feture aims to streamline the payment process, eliminating the need to use third-party payment apps.

Revamping digital payments experience in @Olacabs rides. You’ll be able to use UPI to pay the driver directly through the Ola app just like UPI is used daily.

Driver app will show a QR if you want to scan. More than 2 million drivers on Ola will join the likes of millions of…

— Bhavish Aggarwal (@bhash) November 30, 2023

How does the new payment system work?

According to Ola, The new system will allow users to create a UPI ID within the Ola app and link their bank accounts for seamless transactions.

After each ride, customers can complete the payment by entering their UPI PIN, ensuring a secure transaction.

Notably, This method removes the hassle of entering card details, IFSC codes, or recharging a wallet. Additionally, customers have the option to pay by scanning a QR code displayed on the driver's app, the company said.

Ola's partnership with ONDC

Ola is not just enhancing its payment methods but also expanding its range of services. The company has recently partnered with the Open Network for Digital Commerce (ONDC) to offer last-mile delivery services for various categories, including food, groceries, and pharmaceuticals.

This partnership also contemplates extending mobility services through ONDC. Moreover, the platform has integrated the option for customers to purchase Ola electric scoote directly through the app.

The rise of UPI plugin adoption

The introduction of the UPI Plugin by the National Payments Corporation of India (NPCI) in July 2022 has seen a growing adoption among online merchants.

It's worth mentioning that the UPI plugin allows for faster, seamless payments without redirecting customers to a third-party app.

Prior to Ola, Companies such as Swiggy, Zomato, Paytm, and Razorpay have integrated this service on their platform. 

Ola's move to integrate UPI payments directly within its app places it in direct competition with other ride-hailing services like Namma Yatri, which also offers a similar feature. 

Join our new WhatsApp Channel for the latest startup news updates