Ola Cabs switches to PayU as main payment gateway

BENGALURU: Ola, an online marketplace for cab drivers, has switched its primary payment gateway to PayU from Zaakpay as the startup competes with Uber and Meru to offer customers the facility of seamless mobile payment transactions.

“At the end of the day, both Ola and Uber want to give customers the best experience, so it is critical to make the payments process seamless,” said Nitin Gupta, co-founder and CEO of PayU India.

Ola has made significant changes and updates in its mobile app in the last three months after atleast two hackers discovered bugs in the taxi-hailing mobile wallet, which allowed unethical individuals with basic programming knowledge to enjoy unlimited free cab rides—one at the expense of Ola and the other at the expense of genuine users, whose wallets become compromised.

However, an Ola spokesman clarified that the bugs were not a payment issue and the change in payment gateway was done for "strategic reasons" and not because of a security threat to transactions. Separately, he said the bugs have been fixed in the latest version of the app.

According to Ola about 40% of its bookings are paid for using its mobile wallet, which was developed in-house, with the payment backend powered by an external gateway. Upasana Taku, founder and CEO, Sequoia Capital -backed Zaakpay said "Zaakpay is purely a payment gateway provider and did not control functioning of the Ola Money wallet and therefore is not responsible for any bugs found in the wallet itself."

Most large ecommerce companies in India including Snapdeal, Flipkart and MakeMyTrip use multiple payment gateways so that incase payments fail through one, transactions can be routed through another. Zaakpay remains Ola's secondary payment gateway, Taku clarified.

According to Gupta, the success rate of topping up Ola’s mobile wallet has risen to 91% after it went live with PayU four weeks ago. The earlier rate was about 85%, according to Taku. The industry average is 80%.

To differentiate the payment experience, PayU has introduced a feature that senses the one-time password that’s sent in a text message to a user’s mobile phone, dispensing with the need to type it in.

Ola, which is operated by Mumbai-based ANI Technologies Pvt, claims it does 200,000 rides every day in the country.Ola launched its in-app wallet in September. Commuters can top up their Ola Money accounts using net banking, credit or debit cards.

Uber has collaborated with Alibaba-backed PayTm and Meru has signed Sequoia Capital backed-Citrus Pay to power its wallet and payments.

Naspers-backed PayU India recently signed up online real estate portal Housing.com and budget hotel platform Oyo Rooms. The company’s clients include Snapdeal, Zomato and BookMyShow.