One-step payment days over: Now use Uber
by topping up virtual wallet Paytm

After being pulled up by the Indian central bank and facing increased competition from other cab services, taxi app Uber is all set to take on both issues with a investment push of $400 million and a new mobile wallet-based payment.

Uber has tied up with payment services firm Paytm after the RBI said it had to have a two-step verification for card-based transactions and users of the taxi app will have to open pre-paid virtual wallet accounts in order to make payments.

Users of the app will have to now open accounts with the payment services firm and pre-load their accounts with cash that can be made through credit or debit cards.

"Once you link your debit card or bank account via a Paytm wallet to your Uber account, you’ll easily be able to top up your wallet using multiple payment options," Uber said in a statement.

India is the first country where it has made such an arrangement.

Those who have already registered with Paytm can just link their accounts with Uber. Others will need to sign up with Paytm which involves regulatory steps like verification of a phone number and email address. Once that is done, the wallet can be topped up in multiple ways.

Unlike earlier when users were debited the amount from their registered credit or debit cards with Uber after a journey, travellers are now required to pre-load their wallets before a trip and the fare will be deducted from the online balance after the journey.

"Once you link your debit card or bank account via a Paytm wallet to your Uber account, you’ll easily be able to top up your wallet using multiple payment options.

Competitors like Meru Cabs, Taxi for Sure and OlaCabs allow customers to either pay virtually using online pre-paid wallets or direct cash payments to the taxi drivers. However, Uber, whose unique selling point globally has been cutting out cash-based transactions, is not expected to follow that model.

Competing against taxi services that have larger fleets, Uber has begun offering discounts to customers and is reportedly planning to pump in more money into their Indian operations.

According to an Economic Times report, the taxi providing service could invest over $400 million in India which it could use to strengthen its presence, expand into new cities and use it to attract more cab providers to the service. The proposed investment push by Uber into India comes  as competitor Ola Cabs got a $210 million boost from Softbank recently. The company has also been attempting, like its competitors, to attract more taxis to it by allying with finance houses  and automakers to make it easier for cab owners to buy new vehicles.

Earlier reports had indicated that Uber is planning to raise at least $1 billion more in capital from its existing investors, which includes Blackrock, TPG, Google Ventures and Menlo Ventures, and new funds from beyond Wall Street and Silicon Valley, especially in Asia.

The company reportedly still has $1 billion in the bank from its most recent round of funding.