Bengaluru: BharatPe has waded into controversy again, with rival payment firms, sending legal notice to the New Delhi-based company for allegedly circulating flyers that tag its competitors as Chinese or American, according to three people aware of the matter.
Digital payment firms have also reached out to Reserve Bank of India (RBI) to stop the on-ground marketing gimmicks adopted by BharatPe to push its quick response codes (QR code) at offline retail points, according to people aware of the matter.
In August, BharatPe’s on-ground staff started distributing pamphlets to merchant partners calling out the ownership of competitors Paytm, PhonePe, GPay and Amazon Pay. The pamphlets called out Paytm’s significant ownership to be ‘Chinese’, while the rest of the players were tagged American.
Mint has seen a copy of these pamphlets and other marketing material.
“BharatPe has been running aggressive on-ground campaigns to smear the reputation of rival payment firms. It has also been using names and brand colours of its competitors, to position itself as an Indian company against rivals. This is while it raises funds from US-based venture capital firms Sequoia and Ribbit Capital,” said an executive of a payment firm.
In May, BharatPe also redesigned its QR code with the Indian tri-colour and ran in-app advertisements, calling other QR-codes as foreign or Chinese. The rival QR codes placed in the advertisement had striking brand colour similarities to rival PhonePe and Paytm, with spoof names – ‘FoneSe’ and ‘Payum’ on it.
Paytm had served a legal notice to BharatPe in May, with the latter withdrawing the rival advertisements on its app, according to another payment executive, quoted above, who didn’t want to be named.
“In its reply to Paytm, BharatPe clarified that it was calling its own QR Indian and not deeming Paytm as a Chinese company. It looks like the company has stopped these pop-up advertisements, ever since,” said the payment executive mentioned above.
Paytm and PhonePe declined to comment.
A BharatPe executive said that it has been distributing the marketing pamphlets to merchants, which contained the ‘significant ownership’ of its rivals, for the past month.
“We take pride in the fact that we are an Indian company and have the word ‘Bharat’ in our name and logo. Also we have redesigned our QR code to add the Indian tri-colour. At a time, when the government is calling out for Indian innovation and apps, why shouldn’t we showcase our ‘Indian’ identity, and through our campaign we aim to achieve just that,” said Ashneer Grover, founder and CEO, BharatPe.
“Our aim is to portray BharatPe as an Indian company and what we have mentioned in the pamphlets is just the ‘significant ownership’ of different companies. Other players are also free to run campaigns to showcase their Indian heritage,” Grover added.
Competitors have also accused BharatPe’s on-ground staff of disfiguring QR codes and stickers of its rivals. Some firms are even looking to write to the company regarding the same.
“As a code of conduct, we do not encourage our onground staff to engage in activities, which involve tearing or disfiguring rival QRs at offline retail points. If there are any instances of this reported, we immediately take punitive action against the concerned person. We believe in healthy competition and shopkeepers should have the choice on the QRs they place first in front of the customer,” said Grover.
This isn’t the first time BharatPe has landed in trouble with its competitors. In May last year, Flipkart-owned PhonePe dragged BharatPe to the Delhi High court over the ‘Pe’ suffix in its name. The former has been in talks with the latter to drop the ‘ Pe’ suffix, since August 2018. However, PhonePe hasn’t been able to seek an injunction order yet.